Volkswagen Layoffs: Such a crisis for the first time in 89 years, one lakh employees face the threat of job loss.

Counted among the world’s leading automobile companies volkswagen These days it is going through its most difficult phase (Volkswagen Layoffs). The company, which once dominated the European market, is now struggling with increasing pressure. The situation has become such that concern about the future of lakhs of employees has increased and preparations for major decisions have begun within the company.

Volkswagen is now planning a large-scale restructuring amid increasing market competition, declining sales and global economic pressure. According to reports, the company may make the biggest layoff in its 89-year history. If the proposal is approved, the jobs of about one lakh employees may be affected and many production units may also be locked.

Volkswagen preparing to close four factories Layoffs

According to media reports, the proposals to be discussed before the company’s supervisory board also include a plan to close the Hanover, Zwickau, Emden and Audi’s Neckarsulm plants. A decision on these proposals can be taken in the board meeting to be held on July 9.

If approval is given to close these factories, then the jobs of about 45 thousand employees may be directly affected. Apart from this, talks have already been held with employee unions regarding reduction in about 50 thousand other posts. In such a situation, a total of about one lakh employees are expected to be affected.

There will be a big cut in investment also

The company does not want to limit itself to just reducing the number of employees, but is also planning to cut its investments by about 15 percent for the coming five years. After this decision, the total investment of the company may come down to around 130 billion euros. Experts believe that the company is taking this step to reduce costs and keep profits balanced.

Chinese companies are becoming the biggest challenge

The biggest challenge facing Volkswagen is the Chinese auto companies (Volkswagen Layoffs). Companies like BYD, Chery, SAIC and LeapMotors are introducing modern technology and better electric vehicles at lower prices. This has had a direct impact on the sales of Volkswagen.

Chinese companies have made rapid gains in the electric vehicle market, due to which Volkswagen’s dominance is continuously weakening. While earlier China was considered the company’s strongest market, now it is facing the biggest challenge from there.

Market share continuously decreasing in China

According to reports, BYD will overtake Volkswagen in terms of sales in the year 2024. After this, there is a continuous decline in the sales of the company. In the year 2020, the share of foreign companies in China’s auto market was about 57 percent, which has now come down to about 32 percent. Its biggest impact has been on companies like Volkswagen.

Pressure from America and Europe also increased

Volkswagen is facing many challenges not only in China but also in Europe and America (Volkswagen Layoffs). Demand for vehicles in Europe is weaker than before, while import duties imposed by the US have also affected costs and business.

The company management has also admitted that there is increasing pressure on the existing business model. Profits have declined due to rising production costs, falling demand and global competition. In such a situation, the company is now preparing to give a new direction to its business by restructuring on a large scale.