Volkswagen has had a rough time ever since news of the diesel emissions scandal first broke out.
The company is currently facing class-action lawsuits, further investigations and an $18 billion EPA fine. Its market value has also dropped by about $25 billion and stocks are down by over 35 percent.
As reported, the company is tightening its belt and is currently implementing certain cost-cutting plans that will involve its extensive employee list. On Tuesday, Oct. 6, Matthias Mueller, current Volkswagen CEO, who stepped in after former eight-year CEO Martin Winterkorn resigned, told the Volkswagen staff within the company's headquarters in Wolfsburg, Germany to prepare for massive cutbacks.
"To be perfectly frank: this will not be a painless process," Mueller said after explaining that the company's current efficiency program will be intensified and its investments will be reviewed.
By the end of 2014, Volkswagen reported that it had more than 583,000 employees worldwide. At its headquarters in Wolfsburg, Volkswagen has over 60,000 workers within its main factory, which is more than 10 percent of its current workforce.
"We must make massive savings to manage the consequences of this crisis," Mueller told the 20,000 staff members who gathered. "Anything that is not absolutely necessary will be cancelled or postponed."
According to CTV, employees within VW's German factories, at the very least, will get bonus cutbacks. Some of the specified employees received more than $6,600 in bonuses last year when the company recorded $10 billion in profit.
"We will do everything we can to ensure that Volkswagen continues to stand for good and secure jobs in the future," Muller remarked.
An estimated 11 million vehicles were affected by the emissions scandal in which the vehicles' software was specifically designed to detect emissions tests, output specific results during the tests and thus, cheat to pass regulations.
Mueller, in a press conference for his appointment as the new VW CEO, stated his intent to restore the trust of the company's clientele, investors partners and the public. The CEO also expressed his confidence that the company can overcome the current crisis and come out stronger. He promises a "swift and relentless clarification" of the issue.
Photo: Gerry Lauzon | Flickr