Volkswagen plans to cut as many as 7,000 jobs over the next five years to slash costs as it prepares for an electric future.
The German carmaker said Wednesday it will eliminate as many as 7,000 positions - with measures including early retirement and not filling vacant positions - for an annual profit gain of €5.9bn ($6.7bn) starting in 2023.
"Volkswagen will be boosting the pace of its transformation. taking important steps this year to strengthen competitiveness on a sustained basis", the flagship brand of the mammoth VW group said in a statement. Net profit for the year rose 6 per cent to 12.2 billion euros.More news: Google is redeploying Pixel staff, raising questions on its future hardware plans
The 5.9 billion euro target for 2023 comes on top of the 2020 target, the company said.
Even as some positions are cut, bosses expect to create 2,000 new jobs in electronics and software development to shape the firm's reorientation, and said they would uphold a job security guarantee valid until 2025.More news: Mercedes look to burst Ferrari's bubble in Melbourne
VW's electric auto portfolio is limited at the moment, but the company hopes to sell at least 1 million battery-powered vehicles by 2025.
"Given the interest in the I.D. family shown by our dealers, I think it is possible that the launch edition will already have sold out before we unveil the I.D.in September", stated Jürgen Stackmann, Volkswagen's board representative for sales, in the conference.
VW will start producing the first model of its all-electric ID auto range toward the end of this year.More news: Trump Tweets About the #FakeMelania Hashtag Conspiracy Theory
After Zwickau, Volkswagen will roll out production of electric vehicles to seven other factories worldwide including two plants in China and a factory in Chattanooga, United States, VW said.