The German company’s management has begun negotiations with unions and the company board for a massive restructuring. According to the press, citing sources from within the concern, Audi is preparing to lay off thousands of employees.
Audi this week announced its financial results for the first three quarters of the year. And the numbers are nowhere near what was expected.
Although Audi is a premium brand, operating profit has fallen to a level similar to Volkswagen, which is a consumer brand.
Audi is preparing to lay off thousands of employees
At 2.5% yield, Audi no longer justifies its status as a premium brand, from a financial point of view. Only the earnings generated by Lamborghini or Bentley save the group’s profits.
After the announcement of the closure of the factory in Brussels, which will mean a collective redundancies for 3,000 people, restructuring is coming in Germany, and the first step will be made in non-productive areas.
Journalists from Manager Magazin, quoted by Profit.rosay thousands of other jobs are affected.
In the first stage, 2,000 people from the development departments, out of a total of 10,000, would be laid off.
Then other departments will follow, with an estimated 15% reduction in non-productive staff. Which means about 4,500 jobs, only in Germany, out of a total of about 30,000.
Of the development department, group CEO Oliver Blume said it was over-sized and unproductive. This is because they work too much with external suppliers.
Information coming from the company, including Audi officials, shows that the brand has too high development and production costs. And the first cut any company looking to cut costs makes is in the employee area.
Negotiations with the unions have begun
Audi cannot simply fire employees because there are collective labor agreements. They block layoffs for the next 4-5 years.
So, the first to leave will most likely be the employees with fixed-term contracts. Then negotiations for voluntary departures could follow.
Departures from the driving range are also expected. Around 100 top managers reportedly have their positions at risk, but the number could be higher.
On the other hand, the company is facing several launch delays. In some cases there are software problems, in other cases, however, Audi CEO Gernot Dollner returned the projects to be modified.
Last but not least, the demand for the new models launched this year is not as high as the company would have liked. And that puts production at risk.
Audi AG’s revenue in the first three quarters of this year fell 8.1 percent amid a 10.9 percent sales decline. Which means a minus difference of 4.1 billion euros.
Operating profit fell to just over 2 billion euros, about 2.5 billion less than in 2023. And Audi’s net profit for the three quarters was 2.4 billion euros, almost half of what was recorded a year ago year.
Source: www.promotor.ro
