Volkswagen and Porsche Followed by Audi... 7,500 Job Cuts

Job Cuts Through Labor-Management Negotiations by 2029
Restructuring Business with 1.3 Trillion KRW Investment... Expanding Electric Vehicles

On December 23 last year, the Brussels branch union held a protest against the factory closure in front of the Audi Belgium Brussels plant. / AFP News Agency · Yonhap News Agency

Audi, which has continued the legacy of German premium automobiles, has decided to cut 7,500 jobs by 2029 through labor-management negotiations due to financial difficulties. This follows in the footsteps of group affiliates Volkswagen and Porsche.

According to the German daily S?ddeutsche Zeitung (SZ) on the 17th (local time), Audi's labor and management agreed on restructuring measures including reductions in office staff excluding production workers. Currently, Audi employs a total of 54,000 people in Germany, including 30,000 non-production staff.

However, the labor and management agreed to reduce jobs through voluntary retirement and other methods instead of layoffs, extending the employment stability agreement by four years until 2033. J?rg Schlackbauer, chairman of the labor-management council, explained, "We could have rejected many of the company's demands, but compromises had to be made."

The company plans to reorganize its business structure along with the reduction measures. Gernot D?llner, Audi's Chief Executive Officer (CEO), stated that they will invest 8 billion euros (about 1.3 trillion KRW) in German plants and convert the Ingolstadt and Neckarsulm factories into electric vehicle production lines.

Audi's sales have sharply declined not only in China but also in Germany, resulting in particularly poor performance compared to other subsidiaries under the Volkswagen Group. Last year, sales in Germany dropped by 21% compared to the previous year, and global sales decreased by 12%, allowing Tesla, a U.S. company producing only electric vehicles, to surpass Audi for the first time.

As demand for electric vehicles plummeted, Audi closed its Brussels plant in Belgium, which produced the Q8 e-tron, at the end of last month. This put about 3,000 employees at the Brussels plant at risk of losing their jobs, leading to protests against the layoffs.

Audi is not the only struggling brand. Volkswagen, the group's flagship brand, also agreed last October to reduce about 35,000 of its approximately 120,000 German employees by 2030 and to halt production at two of its ten German factories. The sports car brand Porsche has been undergoing restructuring since last year, aiming to cut 4,000 jobs by 2029.

The overall group performance has also deteriorated. In the earnings announcement on the 11th, it was revealed that last year's net profit after tax decreased by 30.6% and operating profit by 15.4% compared to the previous year. International credit rating agency Moody's downgraded Volkswagen's credit rating by one notch from A3 to Baa1 the day before, citing worsening business conditions and cash flow.