Audi has shifted from being a profit generator to becoming the “problem child” of its parent company, the Volkswagen Group.
According to the latest quarterly financial report, Audi's operating profit for the third quarter of this year stood at €106 million, a staggering 91% decline compared to the same period last year. One contributing factor is the threat of closure looming over its Brussels plant in Belgium, which produces the Audi Q8 E-tron, resulting in high costs.
As reported by Manager Magazin, in addition to plans to close a plant in Brussels and lay off 3,000 jobs there, Audi is also looking to reduce costs by cutting non-production jobs, aiming for an overall reduction of approximately 15% in its workforce.
Domestically in Germany, this initiative is expected to affect 4,500 non-direct production positions, with the reduction in the R&D department being particularly significant, potentially impacting over 2,000 research and development personnel.
Audi employs around 54,000 people in Germany.
On September 16, 2024, local time, workers from Audi’s plant in Brussels, Belgium staged a protest on the streets.
Audi confirmed to Reuters that the Audi board is currently in discussions with worker representatives but declined to provide further clarification on the total number of layoffs.
The layoffs are connected to Audi's steadily declining performance.
The Brussels plant, responsible for producing the Audi Q8 E-tron, has seen sales of this electric vehicle fall short of expectations.
Sales data for the third quarter show that the Audi Group delivered a total of 407,400 vehicles in the third quarter, marking a 16% decrease year-over-year. Additionally, deliveries in the U.S. market dropped by 21% to 46,752 units, with almost every model experiencing a decline.
Audi has also mentioned that the layoffs could be a gradual process.
In fact, multinational automotive companies are currently facing a wave of layoffs due to economic downturns and the impacts of electrification. Not only Audi, but Nissan also announced last week that it would reduce production capacity and cut 9,000 jobs in an effort to escape a vicious cycle. Nissan currently employs 133,580 people globally.
Regarding the layoffs, Nissan CEO Makoto Uchida declined to provide a timeline for job cuts or production reductions and refrained from revealing when the layoffs will take effect. Some of these layoffs will be achieved through voluntary departures. It has been reported that Nissan, which has seen poor performance in the U.S. market, recently announced it would offer buyout packages to its employees in the U.S.
Around the same time, the world's fourth-largest automotive group, Stellantis, issued a statement announcing that it will indefinitely lay off over 1,000 workers to ensure a strong start in 2025.
