Volkswagen to Reduce Workforce by 2,000 Positions at Cariad Division

29 Oct, 2023

Volkswagen to Reduce Workforce by 2,000 Positions at Cariad Division

According to a report from the German business news outlet Manager Magazin, Volkswagen is set to implement a restructuring plan that involves slashing 2,000 jobs at its software division, Cariad. The decision received approval from the board of directors during a meeting held on Wednesday, with the staff reductions scheduled to commence in 2024.

Cariad has faced criticism due to budget overruns and missed targets, resulting in costly delays in launching vehicle models. This unit, established during the tenure of former VW group CEO Herbert Diess, was entrusted with the task of creating a unified software platform for all Volkswagen brands.

While Volkswagen has not officially confirmed the reported job cuts, a company spokesperson mentioned that CEO Peter Bosch has been actively working on a comprehensive transformation plan to reposition Cariad since the summer. The spokesperson also noted that the plan is in its final stages and will be disclosed once it receives the necessary approvals.

The proposed layoffs signal the challenges Volkswagen is encountering as it strives to enhance its in-house software capabilities. The company faces mounting competition from Tesla and other automakers that have made substantial investments in software development. Volkswagen has also faced criticism for the sluggish rollout of electric vehicles, which rely heavily on advanced software.

The job cuts at Cariad could have broader implications for the automotive software industry. Cariad ranks as one of the largest employers of software engineers in the automotive sector, and the downsizing may result in a shortage of skilled professionals in the field.