BERLIN (Reuters) -Volkswagen plans to cut administrative personnel costs by a fifth as part of a cost-cutting package to save 10 billion euros ($10.8 billion) by 2026, the Handelsblatt daily reported on Monday, citing an internal company podcast.
Gunnar Kilian, Volkswagen’s board member for human resources, said in conversation with VW brand chief Thomas Schaefer that the cuts would focus on cost reduction rather than headcount, according to the Handelsblatt report.
Volkswagen did not comment on the article, but said in an emailed statement on Monday the company would take advantage of a “demographic curve” in its plans, referring to the impending retirement of the baby boomer generation that outnumbers succeeding generations.
The specific details of the drive at Volkswagen’s passenger car brand, announced in June and currently being defined in talks between management and the workers council, are due to be set by December.
The aim of the cost cuts is to boost a flagging margin, at 3.4% in the first nine months of this year, to 6.5%, part of a company-wide drive to improve profitability as Volkswagen transitions to producing electric vehicles.
An internal flyer circulated by Volkswagen in July and seen by Reuters showed that the company had offered a part-time retirement plan to workers born in 1966 and expects around 3,000 people to take up the offer, in one move to bring down costs without firing staff.
Volkswagen has signed an agreement with the workers council to secure jobs until 2029, and the council has repeatedly said it will not allow changes to that agreement.
(Reporting by Victoria Waldersee, Christina Amann; Writing by Victoria Waldersee, Miranda Murray; Editing by Stephen Coates and Bernadette Baum)
