German Labor Market Flooded with Laid-Off Volkswagen Managers
German automotive giant Volkswagen is laying off hundreds of managers as the industry struggles with Chinese competition. Recruitment experts warn that the market cannot absorb this influx of senior staff.
The German automotive giant Volkswagen is firing hundreds of employees in management positions and flooding the market with senior staff while the German automotive industry struggles to cope with competition from China, reports the Financial Times. Manufacturers like Mercedes-Benz and Volkswagen are "pushing out managers at a crazy pace," noted Magnus Tessner, a partner at the research firm IFP, which operates in the automotive sector. According to him, many of these managers are looking for new jobs, even though they received generous severance packages.
According to an external headhunter, Volkswagen approached him with a request to find jobs for about 500 managers:
"I told them it's not possible. We don't have that amount of management positions to fill," he noted.
In parallel, Volkswagen has begun to reduce the number of factory workers in Germany and has formulated plans to cut another 50,000 jobs in the field of product development and sales. The company's Porsche brand also reported its intention to cut 5,000 jobs, mainly in office roles. The plan to cut 50,000 jobs in Germany by 2030 has so far affected employees in the production and office sectors. However, an internal analysis showed that the costs of the administrative divisions at Volkswagen are 30% higher compared to similar departments at other vehicle manufacturers.
"The differences stemmed mainly from the complexity of the group's structure," noted CFO Arno Antlitz in the second-quarter reports.
Even if Volkswagen cuts 100,000 jobs — an unlikely scenario due to opposition from the labor union — the group will still employ about 580,000 people, a figure significantly higher than the 390,000 employees at Honda and 335,000 at Hyundai. Other German car manufacturers are also cutting white-collar jobs. Thus, last week BMW expanded the voluntary retirement program for thousands of employees in office jobs, including product development and planning. The manufacturer based in Munich is expected to cut 8,000 jobs by the end of 2027 through an efficiency program that does not include factory workers, according to a source close to the company.
