German carmaker Audi announced that it will axe 9,500 jobs, approximately 10% of its global workforce, between now and 2025.
The cuts ultimately aim to save €6 billion.
Audi, which is owned by Volkswagen, says the move will allow it to invest more in electric vehicles and digital working.
In a statement the company said that the job cuts “will take place along the demographic curve through employee turnover and a new early-retirement program.”
The automaker guaranteed jobs for its remaining workers until 2029 — Audi said that it is “excluding terminations for operational reasons” until that date.
A key component of the agreement between Audi’s Board of Management and employee representatives is to “allow the economic and future-proof utilization of production capacities”. This includes a massive overhaul of Audi’s Ingolstadt and Neckarsulm plants to make electric vehicles.
The automaker said that annual plant capacity will therefore be planned in Ingolstadt for 450,000 vehicles and in Neckarsulm for 225,000 vehicles, “with production-optimized operation.”
“A long-term future perspective is guaranteed by the electric models to be built at both plants in the future,” Audi said.
Peter Mosch, Chairman of the General Works Council of AUDI AG, commented:
“We have reached an important milestone: The jobs of our core workforce are secure! The extension of the employment guarantee is a great success in difficult times. In addition, the upcoming electrification of the Ingolstadt and Neckarsulm plants underscores the long-term success of both German sites. Important for our co‑workers: The Audi profit sharing remains at its high level.”
Profit sharing refers to giving a percentage of a business’ profits to its workforce.
Audi’s chief executive, Bram Schot, said the cuts would make Audi more efficient. “This will increase productivity and sustainably strengthen the competitiveness of our German plants.”