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Volkswagen plans to lay off 2000 jobs in its software division Cariad, German magazine Manager reported recently. According to key Volkswagen executives, the board approved the plan at Wednesday's meeting with the goal of reducing jobs from 2024 to the end of 2025.

The implementation of the plan will also result in further delays in the new software architecture, with the implementation of the new software architecture 1.2 in the Audi Q6 etron and Porsche Macan delayed by 16-18 weeks, while the next architecture 2.0, originally planned for 2025, is being completely redeveloped. The new Scalable System (SSP) platform is also being redeveloped, and all future models will be based on it, starting with the all-new Trinity electric car, the executives said. A Volkswagen union spokesman said: "This approach to total layoffs is not acceptable. There is no specific information on which jobs should be cut in terms of structure and mission."

In fact, as early as May this year, it was reported that Volkswagen Group would lay off most of the executives of its software division CARIAD to solve development problems. Only Rainer Zugehör, head of personnel, may remain in CARIAD after the dismissal, and all other executive directors will be dismissed.

CARIAD is the software development department of Volkswagen. At present, CARIAD has about 5000 engineers and developers worldwide, mainly working to create a brand-new and unified automobile operating system for Volkswagen's future electric vehicles. The division was set up by Herbert Diess, former CEO of Volkswagen Group, after the Volkswagen Group repeatedly stressed that CARIAD and automotive software development were an "indispensable" part of the Volkswagen Group, but production of two important new models, Porsche e-Macan and Audi Q6 e-tron, was delayed due to overbudget and failure to meet development targets.

CARIAD also faces serious losses. CARIAD lost 2.068 billion euros in 2022, according to Volkswagen Group earnings. The loss in 2021 was 1.332 billion euros, with a cumulative loss of nearly 3.4 billion euros in two years. Software development delays and losses at CARIAD may also have contributed to Diess 'departure in September 2022, and the division is now taken over by Volkswagen Group's new CEO Oliver Blume. According to the official plan, Volkswagen Group planned to develop a new software platform capable of achieving "L4" autonomous driving in 2026, but the platform was later postponed until 2030.

It is worth noting that this time, in addition to being reported that CARIAD will be laid off. As early as September, news emerged that Volkswagen was considering layoffs at its plant in the eastern German city of Zwickau due to sluggish demand for electric vehicles.

In fact, due to the rapid development of new energy vehicles in recent years, the sales volume of Volkswagen's traditional brands has been affected to a certain extent. As one of the world's oldest car companies, Volkswagen is now a bit slow in the wave of electrification. At the same time, it also faces the external impact of Tesla and China's new energy vehicles. According to relevant data, Volkswagen sold 180239 electric vehicles worldwide in the second quarter of 2023, compared with Tesla's 466140 electric vehicles worldwide in the second quarter. From the data, it is not difficult to see that there is still a certain gap between Volkswagen and Tesla in terms of electrification.

The official plan has said that an annual output of 1 million electric vehicles will be achieved by 2023. According to the data, Volkswagen Group is still a certain distance away from this goal. At present, Volkswagen Group is also accelerating its electric transformation in China. According to the plan, by 2030, Volkswagen Group brands including Volkswagen and Audi will offer more than 30 pure electric models in China. However, as the new energy track becomes more intense, Volkswagen Group will also face serious challenges.

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