Audi to cut 7,500 German jobs by 2029 in €1bn annual savings drive

Audi will cut 7,500 jobs in Germany by the end of 2029, the carmaker and the works council announced on Monday, following extensive negotiations.

Together with other financial cuts for employees, the move aims to save the German luxury car manufacturer more than €1 billion ($1.09 billion) per year in the medium term.

The company, which is owned by Germany's Volkswagen Group, and the works council had long wrangled over the savings plan, but have now agreed on a concept. Works council chairman Jörg Schlagbauer said the company originally planned to eliminate 12,000 jobs.

Management board chairman Gernot Döllner said: "Audi needs to become faster, more agile, and more efficient. One thing is clear: this won’t be possible without workforce adjustments."

No forced lay-offs until 2033

But Döllner emphasized that "there will be no compulsory redundancies up to the end of 2033. In difficult economic times, that is good news for all employees."

The current job security programme, which prevents compulsory redundancies, will therefore be extended until the end of 2033. It previously applied until the end of 2029.

Job cuts before 2029 are instead expected to come through voluntary redundancies, end of contracts and normal churn.

Audi also said it plans to invest €8 billion in its German sites.

"We are positioning Ingolstadt and Neckarsulm to be robust and flexible for the challenging transition to electric mobility," Döllner said. Ingolstadt is near Munich and Neckarsulm is near Stuttgart.

Exact distribution of cuts unclear

Audi said the job cuts will not affect production and will reduce bureaucracy.

The first 6,000 jobs are to be cut by 2027 and a further 1,500 by the end of 2029. It is not yet clear how the cuts will be distributed between the Ingolstadt and Neckarsulm sites.

Further cuts will affect Audi employees' pay. The company's profit-sharing scheme will be reorganized and reduced for several years, involving significant sums.

In 2024, the employee profit-sharing scheme paid out €8,840 per employee for 2023.

Participation for 2024, which will be paid out in the current year, will not be affected by the reduction - but it is likely to be weaker anyway due to the recent downturn in business.

The company will present its full financial report for 2024 on Tuesday and the figures are not looking good.

In the first nine months, profit had almost halved. Audi suffered from a lack of parts for important engines, weak demand in China and provisions for the closure of its plant in Brussels.

Works Council: Other reductions averted

Schlagbauer - from the union-like works council which most large German firms must have - acknowledged that while the workforce is making sacrifices to help Audi recover, some key protections were secured. Regular monthly pay, bonuses, and scheduled wage increases will remain untouched.