Volkswagen's Audi will cut up to 7,500 jobs in Germany by 2029 in areas like administration and development, the premium carmaker has said, the latest German auto industry player to reduce costs.
The planned measures, agreed by management and labour representatives, should save the carmaker €1 billion a year in the medium term, it said, adding it was investing a total of €8 billion in its German sites in the coming four years.
The cuts at Audi bring layoffs currently planned across the Volkswagen Group to just under 48,000 - VW has unleashed a cost-cutting programme involving 35,000 job cuts, Porsche plans to cut 3,900 jobs, and software unit Cariad aims to slash around 1,600.
Audi has already cut around 9,500 production jobs since 2019, a move it said at the time should free up billions of euros to fund its shift to EVs and boost margins to 9%-11%.
But the brand has fared poorly in recent years, with its operating margin crashing to 4.5% in the first nine months of 2024 from 7% in the same period of the previous year due to weak sales in its key markets and the cost of ceasing production at its struggling Brussels plant.
The premium carmaker plans to make a new entry-level electric model at its Ingolstadt plant, and is considering a further model in its second German site of Neckarsulm, it said, a soothing sign for German labour representatives nervous about carmakers opting to produce EVs in cheaper countries.
A job security guarantee agreement at its German sites was extended to the end of 2033, Audi said.
"The negotiations were tough, but always factual and solution-oriented -. we had to make compromises to allow financial flexibility for additional investments," Joerg Schlagbauer, head of the works council, said in a statement.
Meanwhile, Audi said today it is weighing whether to pass on the costs of US import tariffs to customers via price increases, adding it was expecting a decision this year on localising production in North America.
Audi has no factory in the US but is one of the carmakers most exposed to US import tariffs via its plant in San Jose Chiapa, Mexico, which makes the popular Q5 and employs over 5,000 people.
US President Donald Trump earlier this month agreed to exempt automakers for a month from his punishing 25% tariffs on Canada and Mexico so long as they complied with existing free trade rules.
Audi's finance chief Juergen Rittersberger said the company was considering "the extent to which we will have to pass on at least some of the tariffs to our customers in the form of price increases".
Audi CEO Gernot Doellner expects a decision on localising production in the North American market - which could include using existing plants of the Volkswagen group or a new plant - this year.
