Demand weakens

Car manufacturer Audi cuts thousands of jobs

(Bild: All Rights Reserved stock.adobe)

Like its parent company Volkswagen, German car manufacturer Audi is eliminating thousands of jobs. A total of 7500 jobs in Germany will be affected by the end of 2029. The company and the works council have reached an agreement on this, which includes the waiver of compulsory redundancies, as announced by both sides.

Audi is currently suffering from weakening demand - particularly for electric cars - and was also struggling with a shortage of parts in 2024. The plant in Brussels will be closed, which will cost billions more. The turnover of the Progressive brand group, which includes Lamborghini, Ducati and Bentley in addition to Audi, shrank by almost eight percent to 64.5 billion euros in 2024, while profits fell by a good third to 3.9 billion euros. The operating return on sales fell accordingly to six percent.

The announced job cuts will affect the indirect area, which includes administration and development. Audi CEO Gernot Döllner explained that a viable agreement for the future of the company had been reached together with the employee representatives. Audi must become faster, more agile and more efficient. "One thing is clear: this is not possible without personnel adjustments."

We were able to fend off many of the company's demands from the employees, but we also had to make compromises to allow financial leeway for additional investments.

Betriebsratschef Jörg Schlagbauer

Tough but solution-oriented negotiations
In addition, labor costs are to be reduced by adjusting above-tariff and variable payments for employees covered by collective agreements. Management and the Management Board also made a significant contribution to this. In total, the aim is to save more than one billion euros annually in the medium term. Head of the Works Council Jörg Schlagbauer said that the negotiations had been tough, but that both sides had always been objective and solution-oriented. "We were able to fend off many of the company's demands from the employees, but we also had to make compromises to allow financial leeway for additional investments." Audi had already cut thousands of jobs in production from 2019 and significantly reduced capacity in the plants.

In return, job security at Audi was extended until the end of 2033. A future fund with a volume of 250 million euros will be set up to support new technologies and further training in Ingolstadt and Neckarsulm. The two German plants are to receive additional models. According to the company, the Q3 is to be produced in Ingolstadt in conjunction with the plant in Györ, Hungary, and there will also be another electric model in the entry-level segment. Another model is being examined for Neckarsulm. A location fund with a volume of 250 million euros will be set up to secure the future. Audi is also refraining from outsourcing business areas. At times, media reports suggested that the canteen or maintenance, for example, were to be outsourced.