An unexpected turn. Volkswagen is laying off almost 300 temporary workers at its factory in Zwickau, Germany, which specializes in the production of electric cars. The German car company announced this decision in response to a sharp decline in demand for electric vehicles, especially in its home country. Orders for electric Volkswagens have fallen by as much as 70% after a government initiative to promote electric driving ended this month.
The decision affects 269 employees whose temporary contracts will not be extended. This workforce reduction not only raises questions about the future of this specific factory, but also casts a shadow over the employment security of almost 2000 other temporary employees in the same factory. Located close to the Czech border, this facility is the only one in the Volkswagen group that produces exclusively electric cars, and not only for Volkswagen itself, but also for its subsidiaries Audi and Cupra.
For Volkswagen, this development comes at a time when the company has invested in an electric future. The Zwickau factory was a crucial pawn in their strategy to become the market leader in the electric car industry. Commercial vehicles, which make up a large portion of EV demand, have been particularly hard hit. Up to 70% of some models produced in Zwickau fell into this category.
Sources indicate that the expiration of German government support for electric commercial vehicles is taking a heavy toll on orders. This raises important questions about the sustainability of demand for electric cars without substantial government support. It also requires a reconsideration of the HR policy of large companies such as Volkswagen, which are now forced to quickly downsize.