Volkswagen is set to reduce its workforce at its Cariad software division by 1,600 employees by the close of this year, according to a report from Handelsblatt on Tuesday. This significant downsizing will impact nearly 30% of the unit's 5,900 staff members.
The layoffs are primarily expected to be carried out through redundancy programmes, the German business daily noted. Volkswagen confirmed the development, which has raised concerns within the automotive and tech sectors alike.
In a statement to Reuters, the company explained that the restructuring was part of an ongoing "transformation plan" initiated in 2023. "Last year, we already made the organisation more efficient as an internal software solutions developer with higher in-house performance and are now also adjusting the number of employees accordingly," a Volkswagen spokesperson stated.
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This move follows a broader trend within the automotive industry, as carmakers increasingly focus on digital transformation and in-house technology development, leading to both opportunities and challenges for their workforce.
Volkswagen's decision to streamline its Cariad division marks another milestone in its quest to position itself at the forefront of the digital and electric vehicle sectors, although it comes at a significant human cost for the affected employees.
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