According to media reports, German luxury automaker Audi announced on March 17 that it will cut up to 7,500 jobs in administrative and research & development (R&D) sectors in Germany by 2029. This move makes Audi the latest company in the German automotive industry to implement cost-cutting measures.
Audi stated that its management and labor representatives agreed on the plan on March 17, which is expected to save the company €1 billion ($1.1 billion) annually in the mid-term.
Joerg Schlagbauer, head of Audi's works council, said in a statement: "Although negotiations with labor representatives were tough, both sides remained fact-based and solution-oriented. The company had to make some compromises to gain greater financial flexibility for additional investments."
Since 2019, Audi has already cut around 9,500 production jobs. At the time, the company said the measure would save billions of euros to fund its transition to electric vehicles and help increase its profit margin to between 9% and 11%.
However, Audi's performance has struggled in recent years. Weak sales in key markets like China, coupled with cost issues related to the shutdown of its troubled Brussels plant, have caused its operating profit margin to plummet from 7% in 2023 to 4.5% in the first nine months of 2024.
Despite the layoffs, Audi also announced that it will invest €8 billion in its German plants over the next four years. The company plans to produce a new entry-level electric vehicle at its Ingolstadt plant in Bavaria and is considering manufacturing another model at its second plant in Neckarsulm. This decision has reassured German labor representatives, who feared automakers might shift EV production to lower-cost countries. Additionally, Audi confirmed that job security agreements for its German plants have been extended until the end of 2033.
With this latest round of job cuts, Volkswagen Group's total planned layoffs now approach 48,000. Volkswagen has already initiated a 35,000-job reduction plan, while its luxury brand Porsche plans to cut 3,900 positions, and its software division Cariad is set to eliminate around 1,600 jobs.
