Volkswagen turns to an executive recruitment firm to find jobs for hundreds of managers. Germany’s labor market is becoming flooded with executives as Volkswagen, like other car manufacturers, proceeds with layoffs involving hundreds of management positions as part of sweeping cuts to its administrative workforce.
The same is happening at other major groups at a time when Germany’s automotive giants are facing intense pressure from Chinese carmakers. Manufacturers such as Mercedes-Benz and Volkswagen have been “removing executives at a furious pace,” said Magnus Tessner, a partner specializing in the automotive sector at executive recruitment firm IFP. Μany of the executives were looking for new positions, although their departure had been cushioned by generous severance packages, he added.
Positions for Executives
An external executive search consultant said that VW had approached the firm to find new positions for between 400 and 500 executives, according to the Financial Times. “I told them that we couldn’t do it… we don’t have 400 executive positions that need to be filled,” the recruiter said.
VW has already begun reducing the number of employees at its factories in Germany, but it has drawn up plans to eliminate another 50,000 positions in “indirect” areas of the business, such as administration, product development, and sales. Porsche, the company’s sports-car brand, has also announced plans to eliminate 5,000 jobs, mainly in administrative positions.
VW’s original program to cut 50,000 jobs in Germany by 2030 covered employees in production and administrative positions across the group, including the VW and Audi brands, as well as its software division, Cariad. However, these plans were not sufficient, and an internal analysis found that administrative costs were 30% higher than those of other manufacturers.
The difference was “largely due to the complexity of the group’s structure at all levels,” said Chief Financial Officer Arno Antlitz during the presentation of the group’s second-quarter results.
Even if VW ultimately eliminates 100,000 jobs — something that is unlikely because of resistance from the unions — the group would still employ around 580,000 people, far more than Toyota’s 390,000 employees and the 335,000 employed by South Korea’s Hyundai.
Porsche
At Porsche, the latest restructuring measures come on top of an existing plan to reduce the workforce by 3,900 positions, including around 2,000 temporary workers employed at its factories. The new program will largely leave factory workers unaffected, Porsche CEO Michael Leiters said on Wednesday.
Porsche had “experienced disproportionate growth in indirect areas, but also … where management positions were created,” Leiters said. The company is now “intervening and making disproportionate cuts” in these areas.
Porsche is eliminating some departments and merging business divisions, while it has reduced the number of positions on its management board from eight to seven, he added.
BMW
Other German carmakers are also cutting jobs among office-based employees. BMW last week offered voluntary departure packages to thousands of office workers, including employees in product development and design.
The Munich-based carmaker is expected to eliminate 8,000 jobs by the end of 2027 through the program, which does not include factory workers, according to a source close to the company.
BMW will reorganize its management structure and merge organizational units as part of its restructuring efforts, BMW CEO Milan Nedeljković told employees.
