Cariad, the software division of Volkswagen, may face an additional 1,000 job cuts in Germany, according to the union IG Metall. The union says management is considering cutting at least 1,000 jobs, which would be nearly a quarter of the local workforce. However, the details and timeline for these cuts have yet to be finalized and will be negotiated with employee representatives. This potential reduction would follow the 2,000 job cuts previously announced for the years 2024-2025. In total, Cariad's workforce could shrink significantly within two years, as Volkswagen seeks to cut costs across its operations.
Cariad was initially created to develop a single software platform for all Volkswagen Group brands, including Volkswagen, Audi, and Porsche. However, the project became more complex than expected, and challenges have grown in recent years. Volkswagen has since shifted its strategy, relying more on external partners like the American company Rivian and the Chinese company Xpeng. This change suggests that the company acknowledges it cannot develop all its software internally at the speed required by the market. The exact role Cariad will play in this new strategy is still unclear.
IG Metall is expressing strong concerns about the proposed job cuts. Jan Otto, the union's representative in eastern Germany, described the situation as an "axe" that would push Cariad "straight into the wall," and he has not ruled out "social struggle actions" if needed. The tone of the discussions suggests an emerging conflict, though no concrete actions have been taken yet. The proposed cost savings would also affect collective labor agreements, particularly concerning working hours and the right to work remotely. However, the union emphasized that the agreement guaranteeing jobs until the end of 2029 remains in place. Economic layoffs are not allowed until that time, meaning any reductions would have to come from other areas, though the specifics are still uncertain.
The union is calling for immediate negotiations on job security and employment beyond 2029 to create "a perspective for the next decade." This request reflects concerns about the long-term stability of jobs at Cariad and highlights the need for a clearer plan for the future. The situation underscores the tensions between the company’s cost-cutting goals and the need to maintain workforce stability and job security for employees.
Volkswagen Software Subsidiary Faces Potential Job Cuts in Germany
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