Volkswagen’s Audi brand has announced plans to reduce its workforce by thousands over the coming years, reflecting ongoing challenges within Germany’s automotive industry.
In a statement released on Monday, the company revealed that it will cut up to 7,500 jobs at its German facilities by 2029. This decision is part of a wider strategy, which has been agreed upon with employee representatives, to lower costs and assist Audi in shifting its production to electric vehicles (EVs).
Audi expects that this move will help save €1 billion ($1.1 billion) over the medium term. Additionally, the company intends to invest €8 billion ($8.8 billion) over the next five years into its German factories to support the transition to EV manufacturing.
Audi stated that “economic conditions are becoming increasingly difficult” and that “competitive pressures and political uncertainties are posing significant challenges” for the company.
The planned job reductions will account for approximately 8.6% of Audi’s global workforce, based on information from the automaker’s website.
Audi explained that the planned job cuts are partly aimed at reducing bureaucracy. The company has already “significantly reduced” the number of internal committees and is working to ease employee workloads through increased digitization.
These job reductions add to the more than 35,000 positions Volkswagen has already planned to cut in Germany by the end of the decade.
Volkswagen has acknowledged the need for a major overhaul as it faces rising competition from Chinese electric vehicle manufacturers and slowing sales. German automakers, which began shifting to electric vehicle production later than their Chinese counterparts, now find themselves playing catch-up to companies like BYD and Xpeng.
Additionally, a potential 25% tariff on cars imported into the United States, proposed by President Donald Trump to take effect on April 2, could further impact the German auto industry. If implemented, the tariff would likely make German cars more expensive and less appealing to U.S. consumers compared to domestically produced models.