Volkswagen's Audi to cut 7,500 jobs in administration, development by 2029

BERLIN (Reuters) - Volkswagen's Audi will cut up to 7,500 jobs in Germany by 2029 in areas like administration and development, the premium carmaker said on Monday, the latest German auto industry player to reduce costs.

The planned measures, agreed on Monday by management and labour representatives, should save the carmaker 1 billion euros ($1.1 billion) per year in the medium term, it said, adding it was investing a total of 8 billion euros 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. It is reporting its full-year annual results for 2024 on Tuesday.

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.

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(Reporting by Victoria Waldersee and Christina Amann)