Volkswagen's switch to electric cars means major layoffs for the employees
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The German car giant plans to get rid of more than 10,000 employees in the next few years as the company's focus switches more and more towards EV production in the aftermath of its notorious diesel scandal.

Karlheinz Blessing, the Head of HR at VW, told Germany's Frankfurter Allgemeine Zeitung last week that the number of employee layoffs in the company was expected to reach a 5-digit number in the upcoming years. The main reason for that is Volkswagen's (XETRA: Volkswagen [VOW3]) foray into manufacturing electric vehicles that is getting more and more serious and will require fewer employees in a long term to satisfy the production needs, says the company.

"It's not about dismantling a few hundred jobs. Over the years, it will amount to a five-digit figure around the world," Blessing said.

The auto group currently employs more than 620,000 people worldwide, with 280,000 of employees working in Germany, reported The Local. Interestingly, Blessing noted that there would be no "forced dismissals" but rather natural fluctuation of workforce whose tasks would get redundant when the new production processes come in force.

This comes as part of the recently announced plan of Volkswagen's management board on reshaping the manufacturer's core automotive business into an EV-focused company. Developing autonomous driving technology is also part of the restructuring plan that the company expects to boost its profit margins to 7%-8% as compared to the last year's 6%, reports Fortune.

The company has already introduced their first EV models during September's Paris Auto Show together with several other German manufacturers like Mercedes (XETRA: Daimler [DAI]). But, according to the company, this is just a beginning: in the next 10 years, Volkswagen will launch over 30 all-electric models and sell at least 1 million vehicles by 2025.

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One of the new models, the ID concept car, is the company's first long-distance electric car capable of driving 600 kilometres (about 370 miles) on a single charge and is estimated to be out on the market in 2020, with a self-driving version of the car coming later, said the Financial Times. The ID concept car is built on a completely new platform developed by Volkswagen that requires much less human attention during the production phase as it is free of the "traditional" massive internal combustion engine, what explains the company's aggressive workforce optimization plan.

The experts say that by switching to the EV production, Volkswagen is trying to make up for its painful diesel crisis when 11 million VW diesel cars were caught using cheating software. And the company seems to be very serious about its new plan. Germany's Handelsblatt said that Volkswagen is rumoured to make plans of building a huge $11 billion battery manufacturing plant in Germany in order to self-produce the batteries for their EVs. VW HR Karlheinz Blessing also suggested in the same interview last week that Volkswagen should minimize its dependence on the Asian producers to supply the batteries for the company's EVs.

"If in the future about 30 percent of the profits come from battery production, it will justify our consideration whether to go in that direction and not. We can not leave this decision to others. And how far we are to be involved in this, we will be talking in the future agreements," said Blessing, as reported by Die Presse.

Other prominent car manufacturers supported the idea of settling a domestic production of batteries in Germany even though it would be considerably more expensive than importing them from Asia. Porsche's Work Council Chairman Uwe Hück said that in case German car manufacturers choose in favour of purchasing affordable batteries from Asia instead of locally producing it, this would result in a "social uprising" from the side of employees. Hück said that importing batteries from Asia would cause massive job losses in the country and building factories in Germany should be the manufacturers' best choice.

"Just because some company bosses are being greedy and unreasonable and only think about the lucrative returns, does not mean we should get in a serious trouble here", Uwe Hück told Deutsche Presse-Agentur.

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