Faced with the biggest crisis in its history, Volkswagen is planning its most expansive reform program in decades. The automaker’s core brand plans to slash costs by €3.7 billion ($3.9 billion) every year through 2020 and lay off tens of thousands of workers, Handelsblatt has learned.
The cost cutting will result in 20,000 layoffs at VW plants in Germany, according to Handelsblatt sources at the company. Another 10,000 layoffs will hit VW plants abroad, primarily in North and South America where sales have plummeted. The VW group has more than 600,000 employees worldwide.
VW also intends to significantly reduce the number of models and configurations its offers in an effort to boost productivity by 25 percent.
The automaker aims to more than double its profit margins to 4 percent by 2020 and then boost its margins to 6 percent after that.