Volkswagen in plans to cut its workforce by 4,000 jobs in early and partial retirement offerings which will cost £425m

• Says it expects close to 900 employees to accept early retirement in a

Charles Abuede

German automaker, Volkswagen Group, has revealed the plans to slash its total workforce by 4,000 in Germany as the auto manufacturing giant is making plans to offer its older employees an early or partial retirement – a move which is estimated to cost Volkswagen hundreds of millions of pounds which is allegedly estimated at 425 million pounds according to sources close to the company.

The company, in a statement on Sunday which was confirmed by sources, stated that as a matter of its agreement with the works council, it will offer early retirement to its workers who are born from 1956 to 1960 while those who were born up to 1964 will be offered partial retirement while further expressing confidence that 900 of its workers are likely to accept early retirement while few thousand are expected to choose partial retirement.

According to the source, the move by the German automaker will be implemented at 6 of the company’s plants located in Germany, which aggregately have a headcount of around one hundred twenty thousand currently. Though, an earlier report German Handelsblatt had suggested that the automaker will lay off up to a higher five thousand jobs instead.

The Wolfsburg-headquartered company, which is in the phase of transitioning into a technology company from the conventional car-making business model has refrained from commenting on the cost associated with the job cut but said depends on the number of employees who will accept the offer.

In a related development, Volkswagen, in its plans to transition to a tech company as a means to upgrade its car-making business model much like Tesla, has announced the increase in its training budget to 171 million pounds by about 34 million pounds. The makers of the prominent luxury brand, Audi, also highlighted on Sunday that its hiring freeze which it had previously strategized for the first three months of 2021, will now be put in place until the end of the year as it said external hiring will e possible for digitization, electric vehicles and the development of battery cell segments.

Meanwhile, the auto-manufacturing heavyweight has also revealed that it has set its target to cut its procurement cost by 7 per cent and overhead costs by 5 per cent for the next two years.