Volkswagen to cut 7,000 jobs in electric vehicle push

Volkswagen accelerates electric car push

VW vows to build 22-million electric cars over next decade

The profit margin at its core VW brand slipped to 3.8% previous year, down from 4.2%, as higher investments into electric cars and challenges getting combustion-engined vehicles certified ate into profits.

"We will significantly step up the pace of our transformation so as to make Volkswagen fit for the electric and digital era", VW brand COO Ralf Brandstaetter told Bloomberg. VW has around 110,000 employees in Germany, and protections that prevent redundancies are in place until 2025. VW has been pushing to rein in bloated expenses to lift profitability that's trailing rivals.

This comes as its latest earnings revealed the operating margin at its core brand had taken a hit from new emissions tests. Net profit for the year rose 6 per cent to 12.2 billion euros. Diess, who also heads up the VW brand, has been axing slow-selling models and vehicle variants to reduce complexity.

Volkswagen rose 0.8%t to €145.1 at 9:42am in Frankfurt trading.

Most of the job cuts are expected to be carried out through retirement offers.

At the same time, VW will create 2,000 new software jobs, as well as electronics positions in technical development, it said. "We are on track", Brandstaetter said. The company noted in a statement that "with regard to all measures, Volkswagen has given its workforce a job security guarantee until at least 2025".

Volkswagen's push to launch so many electric cars is fueled partially by its adherence to the Paris Agreement.

For this year, the VW nameplate targets revenue growth of as much as 5% and an operating return on sales between 4% and 5%.

The first electric vehicle on the platform - the "ID" - will hit showrooms in 2020 and VW expects the launch edition to sell out, VW's board member for sales Juergen Stackmann said.

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