Audi Cuts 7,500 Jobs in Germany, Delays EV-Only Plans

As part of its labour cost reduction exercise, Audi has decided to cut 7,500 jobs in its German production sites.

Audi has had a tough 2024, as the German automaker suffered an 11.8% drop in its annual sales figure last year. In order to stop this bleeding, Audi has announced plans to slash 7,500 jobs across all its production sites in Germany, while at the same time increasing production flexibility to manoeuvre through this challenging transition period between ICE and EV.

The German automaker reached the decision after extensive negotiations with employee representatives, where the 7,500 job cuts will be done in stages from now until 2029. On top of that, Audi has also agreed to extend its “job protection plan until the end of 2033.”

The first 6,000 positions are slated to be phased out by 2027, with the remaining 1,500 reductions to be done by the end of 2029. The bulk of the positions set to be eliminated are primarily in both administrative and non-production areas. Audi also says that there will be no compulsory redundancies, extending employment guarantees until the end of 2033.

On top of job cuts, Audi is also reducing employee bonuses, with its profit-sharing bonus scheme for workers set to be cut further in the subsequent years from €8,840 (RM42,869) per employee given in 2024.

Both of Audi's Neckarsulm (left) and Ingolstadt (right) plants in Germany will play a significant role in the automaker's transition from ICE to EV productions.

As part of this major restructuring, Audi has also committed to investing €8 billion (RM38.796 billion) in its German operations to help with the transition from manufacturing full combustion (ICE) vehicles to electric ones (EVs). This includes expanding the EV production at its Neckarsulm plant, which will be in charge of producing a new large electric sedan, possibly an all-electric twin of its flagship saloon, the Audi A8.

Besides the new A8 EV, Audi is also planning to debut a new entry-level EV at its main Ingolstadt plant, while the upcoming Audi Q3 will be manufactured outside of Germany in Hungary instead.

More importantly, the company has also said it will continue investing in ICE powertrain production at this plant beyond 2030, thus delaying its initial plans to phase out ICE production and cease their sales in Europe by 2033. Given the uncertain pace of electromobility adoption, it does make sense that Audi now joins the long list of European automakers in delaying their respective electrification plans.