Volkswagen AG will eliminate about 30,000 jobs, the majority of them in Germany, as it struggles to cut costs in the wake of a diesel emissions scandal that some analysts estimate will eventually cost it as much as $30 billion or more.
The cuts are expected to save the embattled automaker about 3.7 billion Euros, or nearly $4 billion annually, according to VW CEO Matthias Mueller. However, the move is meant to do more than simply help cover the costs of the diesel scandal.
The job cuts are part of “the biggest modernization program in the history of the group’s core brand,” Mueller told reporters during a news conference at VW’s corporate headquarters in Wolfsburg, Germany. “The VW brand needs a real shake-up,” he added, “and that is exactly what the future pact has turned out to be.”