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Volkswagen to cut thousands of jobs in €4bn modernisation drive

WOLFSBURG, GERMANY - OCTOBER 21: The Volkswagen logo stands illuminated on an administrative building at the Volkswagen factory and company headquarters on October 21, 2015 in Wolfsburg, Germany. According to media reports a Volkswagen spokesman has acknowledged that the emissions cheating software the company installed in its EA 189 diesel motor in 11 million cars and light trucks worldwide might also be present in another diesel motor called the EA 228. The software the company deliberately installed manipulates diesel engine emissions results under testing conditions. Volkswagen faces investigations and fines in countries across the globe. (Photo by Sean Gallup/Getty Images)

Volkswagen will invest as much as €4bn (£3.6bn) until 2023 to digitalise its operations.

The automotive giant said this morning it could cut up to 4,000 jobs in non-production units in the process. But, it added, the move will also create “at least 2,000” jobs elsewhere. The job cuts will come in Germany.

Read more: Volkswagen puts away €1bn contingency fund for dieselgate damages

It said manual tasks will become more simple “through improved IT”.

The cuts will mainly centre around administrative roles, where digital processes are upending traditional roles across industries. It also said the modernisation would include a new “highly efficient purchasing system” and “new standard human resources applications”.

The news will concern those employed in procurement, HR and other administrative roles in the firm’s Wolfsburg base. But, it added, it will not make any compulsory lay-offs until 2029.

“A precondition for this is that tasks are eliminated as a result of digitalization,” it said.

Volkswagen chief operating officer Ralf Brandstätter said the move was part of “making the company fit for the digital era.

“If we have to eliminate jobs as a result of digitalization we are doing so along the demographic curve in the most socially responsible manner possible.”

Read more: Volkswagen to build Tesla-style gigafactories as it ramps up electric car production

Chief executive Herbert Diess warned in March that building zero-emission cars took “30 per cent less effort” than those with internal combustion engines.

Board member for HR Gunnar Kilian said the firm was “painting a picture of the future”. “[This] only shows us the quantitative side to our workforce requirements, but also identifies the skills we need to succeed in competition”.