Europe's largest automaker announced on Friday they are planning to cut 30,000 jobs over the next three years. The cuts are needed to reduce costs as it works to overhaul its plants in Germany. They are attempting to boost their profits in the wake of the huge emissions scandal. The vast majority of the job cuts, approximately 23,000, will be from its home market, Germany. The company said reductions in Germany had been agreed with union leaders and will be achieved by voluntary redundancies, closing positions as they become vacant and early retirement. 30,000 jobs may seem an extremely large amount of jobs to be cutting, but the world's largest automaker currently employs over 610,000 workers worldwide. They also operate 100 production facilities across 27 countries.
These measures are expected to boost profits by $3.7 billion euros ($3.9 billion) a year from 2020. They are also expected to boost productivity at its German plants by 25% the company said. As part of their restructuring, they announced they will invest about $3.5 billion euros ($3.71 billion) into areas such as electric cars, components and battery systems, creating 9000 new positions in Germany.
The emissions scandal erupted in September 2015, when the United States Environmental Protection Agency issued a notice of violation of the Clean Air Act to the Volkswagen Group. They found Volkswagen had intentionally programmed turbocharged direct injection diesel engines to activate certain emissions controls only during laboratory emissions testing. They were actually emitting forty times the emissions they claimed their engines were emitting. Volkswagen has deployed this program in about eleven million cars worldwide - during the model years 2009 through 2015. The giant automaker is facing tens of billions in fines and compensation payments.