Volkswagen to cut 30,000 jobs

The VW brand will create 9,000 new jobs through investments in electric car technology.

Volkswagen to cut 30,000 jobs

One of the largest German car-maker Volkswagen has announced 30,000 job cuts by 2021.

Reportedly, Volkswagen along with its labour unions has agreed to job cuts at its VW brand as part of a plan to boost profitability and fund a shift to electric and self-driving cars after its emissions scandal, a source told Reuters on Friday.

Reportedly, the largest european automaker is trying to increase savings at its biggest unit in Germany, where its costs are high, while needing to find billions of euros to pay for the cleanup related to its diesel emissions cheating scandal.

The agreement reportedly, targets 3.7 billion euros ($3.9 billion) in annual savings at VW's namesake brand, which will involve 23,000 job cuts in Germany alone, another source said in the report. It is to be noted that VW group has 6,10,076 employees across the globe.

Report said the pact aims to increase the brand's operating margin from an expected 2 percent this year. It has been known that labour leaders agreed to the cuts in exchange for a management pledge to create new jobs and invest in electric cars, especially at factories in Germany.

Therefore, while cutting traditional jobs, the VW brand will create 9,000 new jobs through investments in electric car technology.

The source in the report informed that VW managers have agreed to build an electric sports utility vehicle at the company's main plant in Wolfsburg and a smaller electric vehicle, known as the I.D., in the eastern German city of Zwickau.

It has been said that electric motors will be built in Kassel, and VW will start battery cell production in Salzgitter. It will build full battery packs at its plant in Braunschweig, the first source said.

In a report of German newspaper Handelsblatt, it was earlier reported that up to 30,000 jobs would be cut by 2020 to save up to 4 billion euros. It also said some 10,000 jobs would be axed outside of Germany, mainly in North and South America.