I'm not sure if these are actually layoffs. In the German news it sounded more like nobody is getting fired - so perhaps they are simply not replacing workers who retire?
Yes, they are going to give older workers good conditions for early retirement and will not replace those exact positions. The work council has agreed to the conditions.
Also, they are creating 9k new jobs in e-mobility.
When you retire, you are basically stating that you are unfit or unwilling to continue working, and as such the company you have worked for all this time should continue to pay your living expenses.
Getting a new job basically says that you can and want to continue working.
Well id need to see the schemes rules but certainly in the UK you can take a pension now and work - or you can defer it and take it later.
Typically you would defer and work at the new job 90% of the people who built out the uk's mobile network did this.
They took redundancy from the GPO /BT got a huge pay off (3 years salary tax free) and 6 extra years on the pension and then worked for the competition.
And a pension is deferred pay not some grace and favour hand out from a feudal lord. And for some DB schemas when you hit the max years it makes sense to take redundancy as you cant build up any more pension.
Also, I can't do this is different from I can't do anything. Many people have part time or lower stress jobs in retirement as something to do. Working a 40+ hour week on a factory floor is much more demanding than teaching a welding class 2 days a week at the local community collage.
My experience working for a German company is that there's a strong cultural distaste for laying off employees. I've seen major projects get shut down, and I saw huge cost-saving measures after the 2008 downturn, but there was never any question of letting people go. People got moved to other projects, or had enforced, unpaid vacations, but no layoffs.
I suspect it's driven by strong employee protections in German law.
Exactly. The company needed to save a ton of money in 2009, so, instead of laying anyone off, they gave everyone an extra 4 weeks of vacation and an equivalent cut in their salary for the year.
Your comment isn't aligned with reality on many fronts. Take it from someone who had to pay for employee salaries using credit cards and a second mortgage on my home back in 2008/9 just to keep them employed as long as possible while searching for solutions.
That is not how business works. Mangers don't have crystal balls. On the other hand, if they did, and saw the massive 2008 economic downturn, it's likely people would have been laid off en-masse months before they did. Good management doesn't mean you see every single approaching storm. And, no, corporations are not evil or greedy.
Shit happens and you deal with it as best you can. Most people think large companies have more wiggle room but that is generally not true at all. Their mass and scale can be very damaging.
I remember talking to one of our automation (as in hardware, not software) suppliers back in 2009. Their orders went from 1,200 machines per month to 200. And this happened, quite literally, over one or two quarters.
When you have an infrastructure built-up over time to service a certain level of business and, overnight, almost without warning, your business gets cut down to one sixth of it's prior size, well, things have to change and they have to change very quickly.
The options are: Drain the company of all cash, everyone loses their jobs and the company goes out of business. Or, lay-off a sizable portion of your workforce, sell off assets, restructure and generally do anything you can to stay alive, remain viable and see daylight on the other side of the singularity that tried to kill you.
Do you really think corporations aren't greedy? Which I do not think is evil. I know business is hard, but the whole model of cutthroat profit seeking (which encourages bad faith actors) is what I have a problem with, so it's not exactly a compelling defense.
If you aren't selling enough product, you have to slow the factory down. But factories often don't slow down efficiently, it can be better to just work 4-day weeks for a while.
It's not really managements fault that we have a boom-bust economy.
And... I think most people prefer a little collective belt tightening and to the risk of losing their livelihood.
Managers are not oracles, they can't always anticipate boom and bust cycles on the market, nor - if they can - does it always make sense to scale production capacity down and back up if the cycles are short.
This is so much better - instead of people chasing latest management gossip, constantly looking over their shoulder and looking for other jobs, we don't hire unless it's necessary (ie regulatory requirements).
Compared to having 2-3 random firing rounds per year when it was semi-random (even the best of the team were let go because they didn't have currently running long term project), morale is much higher (random meant you come in the morning like every other day, suddenly during day there is interview with your line manager and HR, then you have 5 mins to take your stuff from desk and are escorted by security out, and that's it)
Sounds like the US to me. Did I ever tell you about the time when I came in to work on Friday and found out that the next Wednesday would be the last day of work for everybody in the office? Sorry, folks, no severance either. If you have vacation days left, you'll be paid for those as you use them. Otherwise, each departing employee will be provided with 60% of a tissue to wipe away most of their tears.
It will probably be foreign subsidiaries who get the chop - German companies who are all into codetermination at home will hire American union busters to attack unions in other countries
All of those jobs are supposed to be cut by socially acceptable means (e.g. by early or partial retirement). 23k of those 30k of cut jobs are supposed to be in Germany.
(But in the past Volkswagen participated in union busting in foreign plants.)
The most interesting thing in that article for me is that the profit margin that VW has at the moment is just 2%. A relatively small drop in car sales (from, say, autonomous Ubers?) could eat their entire profit and then some. Is the entire car industry run like that?
VW has long suffered from very low levels of productivity. According to Bloomberg, they employ as many people as Toyota and GM combined while making half as many cars as the combined entity.
Part of the problem are the unions and a large ownership stake by the state, which is naturally not very interested in having their constituent lose their jobs.
Usually a shareholder needs to own more than 25% of the shares to veto major decisions. For Volkswagen there is a special law lowering this requirement to 20%, which conveniently is the number of shares the state of Lower Saxony owns.
This law also requires a two-third majority in the board of directors (which is distinct from the executive board) to set-up or close down factories. Half of the members in the board of directors are (as in all large German companies) employee representatives, granting them a veto power for those decisions.
This description sounds quite communistic i guess..
But it works really well for everybody..
Some restructuring is necessary though- the whole affair is prone to dig into a technology-tree-branch and stay stuck there.
"How can this be possible? How can VW look so uncompetitive
from a productivity standpoint, yet out-earn all of its
competitors?
"Ah, that's the magic of VW's corporate structure."
Volkswagen pays out high salaries to their line workers, requiring little work by comparison (when measured in hours). VW pay is up 20-50% compared to comparable industry jobs.
Working in manufacturing (knee and hip implants, powered surgery tool geartrains and housings), attention to detail is what we get paid for, not the backbreaking work of pushing a cycle-start button.
Anybody can push a button, but how soon will they notice that one ±.0002" countersink diameter has drifted out of tolerance on a part with dozens of features? If it's slightly out of tolerance, will they have the integrity to reject the parts, or will they let them slip through the cracks? Will they know which combination of metrology equipment will give the most accurate measurement in a particular scenario?
Good machinists and CNC setup operators seem to be hard to find. In industries with high liability risks, you're better off not scraping the bottom of the barrel.
I've worked at a modern car plant, and it's definitely hard work, to the extent of being very painful at the end of the day at first when you're not used to it. It does take its toll, and it's not something you can do for decades unless you are exceptionally healthy.
There's a reason the staff is mostly young, and it's not because everyone goes into management ten years into the job.
I think that sort of profit reporting is similar to the games amazon plays - pick the lowest reported profit your investors will stomach, and make sure to spend enough money on other stuff to make your profit equal that number. If VW experienced a relatively small drop in car sales, they could just stop plowing money into vanity projects like Bugatti or various other long-term R&D to maintain their 2% margin.
The central issue here is also that Volkswagen is going to change massively over the next 10 years. They are about to invest billions in e-mobility, connectivity, and autonomous driving. So the competition among car manufacturers, esp. Tesla and the rest, is going to increase over the next years. Tesla we be on new grounds in 10 years from now.
Or they are going to find themselves so far behind that they have to buy into a Google ecosystem to run their cars and like Android manufacturers they find themselves in the declining hardware margin business.
Or, you know - VW was in the news in a major way for a certain little issue of fudging their emissions testing [1] and is expected to incur costs of US$18.3 billion associated with them [2], in the largest automotive settlement in history. At least one reader of HN (me) finds it interesting to see how this affects the company in terms of profits, sales, and jobs, and to understand the effects on the broader automotive market.
So, VW fudged the numbers on an arbitrary emissions limit in a market sector (diesel passenger cars in the USA) that is so tiny it is environmentally inconsequential, and now 30K people are losing their jobs?
If you ask me, the penalty is entirely out of proportion to the offense.
First, the penalty was a recall of the affected cars. About eleven million of them, in many countries, not just the US. This is almost exactly the definition of "proportional". Second read the article - they're not doing layoffs. Third, don't complain to me. I was simply pointing out why the article was interesting.
Wow ... so Executives who were actually responsible for taking this decisions will get away with it and staff will get fired. Always blame low level engineer seems to be the mantra.
VAG said they had come clean, and now there's another software defeat going through in some Audi models now. Another rogue engineer? That hardly seems credible. Corporate bad faith and malfeasance? They're already in the thick of it.
There may not be explicit blame, but the budget cuts are fallout from the scandal. Thus there are people losing their jobs while other people with (likely) more culpability for the scandal remain employed.
A simpler way to put it would be that there is at least one person with no role in those decisions that is losing their job because of the scandal.
Don't know why you're getting downvoted. Wolkswagen PR specifically blamed "the engineer culture" for them cheating. Like developers take any executive decision ...
You do realize that the CEO and executives who made those decisions were considered engineers? Because they started as engineers at VW, and had climbed the corporate ladder?
The Engineers actually standing in court now are also high-ranking managers. They just also happen to be professional engineers.
Always ignoring the need for thoughtful and balanced research on the matter before forming an opinion seems to be the mantra. Reading more than the headline is hard, I know.
There are no people getting fired, just retiring people are not getting replaced.
I am far from the thought that this will be a lesson in humility to you though.
