VW Plans to Cut Thousands of Administrative Jobs in Germany

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Job losses wouldn’t involve layoffs; auto maker is shifting hiring to more strategic skills

BERLIN— Volkswagen AG plans to cut thousands of administrative jobs in Germany to trim costs as it grapples with an emissions-cheating crisis and shifts new hiring to skills such as software programming and technology, people familiar with the situation said.

The people wouldn’t confirm media reports that 3,000 jobs would be cut but said any job losses wouldn’t involve layoffs, and very few union workers, if any, would be affected. The job cuts would come largely through attrition, early retirement schemes, allowing temporary contracts to expire and transferring office workers to vacant positions.

“There will be no layoffs and there is no hiring freeze,” one of the people familiar with the matter said.

Even before the onset of the diesel emissions scandal and the threat of billions of dollars in fines, Volkswagen launched an efficiency program to cut €5 billion ($5.6 billion) in costs at its Volkswagen brand division. In the wake of the emissions crisis, Volkswagen increased the cost cuts by another €1 billion.

“The Volkswagen brand has initiated an efficiency program that is affecting all areas, including personnel costs,” a spokesman said, declining to elaborate.

Wolfgang Porsche, patriarch of the family that controls a majority of Volkswagen’s voting stock, said earlier this week that in the face of the diesel crisis Volkswagen may have to cut jobs.

The works council, which has warned vehemently against job cuts in the wake of the emissions scandal, didn’t respond to phone calls or email seeking comment.

“Do not make guinea pigs for economic experiments out of the 215,000 employees at the Volkswagen brand,” Bernd Osterloh, head of the works council, which represents employees in all matters except wages, told a gathering of 20,000 workers this week.

Potential job cuts were first reported by German wire service, Deutsche Presse Agentur, which said 3,000 office jobs would go, but that none of the people who lost their jobs would face unemployment. Instead, they would be put on some kind of job scheme or be given early retirement.

The news agency quoted a senior IG Metall union official as saying that under the current union contract Volkswagen cannot legally lay off any union workers.

“The ‘Future Contract’ protects union workers at Volkswagen against layoffs. We are happy that we agreed to that contract,” Hartmut Meine, IG Metall’s chief wage negotiator for Volkswagen employees, was quoted by DPA as saying.

Mr. Meine couldn’t be reached for comment.

Volkswagen declined to comment on the DPA story.

The job cuts envisaged in Germany represent about one-half of 1% of Volkswagen’s total workforce, but it isn’t clear if there will be a net loss of jobs as the auto maker tries to cut costs in the face of fines from the diesel scandal that could amount to between €30 billion and €40 billion, according to analyst estimates.

“We are still hiring, and cutting office jobs could make room for jobs in IT, for example,” one of the people familiar with the situation said.