Volkswagen to cut administrative personnel costs 20% in savings drive, Tata Steel cuts 800 jobs in the Netherlands, Manulife's investment management unit cuts 250 wealth and asset management jobs, Germany's Continental announces job cuts in automotive division, Alstom to appoint new chairman, cut 1500 staff
In continuation from 2022, the year 2023 persisted as a period marked by unexpected job cuts and layoffs, affecting numerous employees. Although the pace of employee terminations had shown a slight deceleration in the past months, the resurgence of layoffs appears to be imminent. The significant wave of mass layoffs witnessed in the past is resurfacing, with companies like Google, Amazon, and now, organisations such as Volkswagen, Tata Steel, and others taking actions to downsize their workforce once again.
According to Handelsblatt's report citing an internal company podcast, Volkswagen aims to trim administrative personnel costs by 20% as part of a cost-cutting initiative to secure savings of 10 billion euros ($10.8 billion) by 2026. Gunnar Kilian, Volkswagen's board member responsible for human resources, indicated during a conversation with VW brand chief Thomas Schaefer that the emphasis of the cuts would prioritise cost reduction rather than a reduction in headcount, as per the Handelsblatt report.
According to Reuters, the company mentioned in an email statement on Monday its intention to leverage a "demographic curve" in its strategies, alluding to the forthcoming retirement of the baby boomer generation, which surpasses succeeding generations. The specifics of the cost-saving drive within Volkswagen's passenger car brand, initially announced in June and currently undergoing delineation through discussions between management and the workers council, are expected to be finalised by December.
Tata Steel, seeking financial support for its Dutch operations, announced an intention to slash 800 jobs in the Netherlands to enhance structural competitiveness and profitability. In October 2021, the company completed the separation of Tata Steel UK and Tata Steel Netherlands into distinct entities within Tata Steel Europe. With a 7 MTPA plant in IJmuiden, the company aims for CO2-neutral steel production in Europe by 2050. To ensure sustained competitiveness and profitability, Tata Steel Nederland is implementing significant measures, including the reduction of 800 jobs in IJmuiden, the company explained.
Amid efforts to strengthen its market position and lower costs, Tata Steel emphasized the need to curtail personnel expenses. Acknowledging the impact on employees and families, the company clarified that around 500 Tata Steel employees, mainly in management, staff, and support roles, might be affected. While maintaining its shift system, the company didn’t rule out forced redundancies and aims to negotiate a social plan with unions.
Of the 300 jobs to be cut, the focus is on temporary workers and non-production-related vacancies. These measures align with the company's transformation into an eco-friendly and circular steel enterprise, warranting substantial investments over the coming years. Tata Steel assured that despite job cuts, it will continue recruiting technically skilled individuals to sustain production and support future green steel initiatives.
Manulife Investment Management
Manulife Investment Management, the global wealth and asset management division of Canada's leading insurer Manulife Financial, has reduced its workforce by 250 positions worldwide, as confirmed by a spokesperson on Tuesday. These layoffs specifically affect Manulife Investment Management's teams in the U.S., Canada, Britain, and Asia, impacting around 2.5% of the total staff in the wealth and asset management unit, according to Reuters.
This move comes amid a broader trend in Canadian financial firms grappling with challenges arising from high costs and a slowing economy. Several banks, including Bank of Nova Scotia, Royal Bank of Canada, and Bank of Montreal, have already announced significant job cuts, amounting to thousands of positions.
Continental, the German car parts manufacturer, announced on Monday its intention to implement job cuts within its automotive division as part of a strategic initiative aimed at achieving annual savings of 400 million euros ($427.96 million) by 2025. While the precise figure for staff reductions has not been explicitly disclosed, the company clarified that the cuts would fall within the "mid-four-digit range."
Alstom announced measures to strengthen its financial position, including job cuts, asset sales, and the consideration of a capital increase to address investor concerns over debt. Henri Poupart-Lafarge will step down as chairman but remain CEO, with Philippe Petitcolin proposed as the new chairman. Despite recent financial challenges, analysts believe the downturn in shares was exaggerated, viewing the cash issues as temporary. Alstom aims to reduce 1,500 positions and trim net debt by 2 billion euros by March 2025, opting not to pay a dividend for the current fiscal year.