Volkswagen is set to lay off 1,600 employees at its software subsidiary, Cariad, by the end of the year, according to a report by German business daily Handelsblatt. The layoffs will affect nearly 30% of Cariad’s 5,900-strong workforce and will primarily be carried out through redundancy programs.
The automaker confirmed the job cuts, citing an ongoing transformation plan aimed at streamlining operations within its software division. “Last year, we already made the organisation more efficient as an internal software solutions developer with higher in-house performance and are now also adjusting the number of employees accordingly,” a Volkswagen spokesperson said in an emailed statement to Reuters.
Cariad, established in 2020 to develop Volkswagen’s in-house software solutions, has struggled with delays and cost overruns in its projects. The unit has been working on key software systems for Volkswagen’s future electric and autonomous vehicles, but setbacks have hindered the automaker’s broader digitalisation strategy.
The restructuring at Cariad is part of Volkswagen’s broader efforts to cut costs and improve efficiency. The software unit has faced internal challenges, including missed deadlines and difficulties integrating its systems across different Volkswagen brands. The automaker aims to enhance its digital capabilities while ensuring smoother execution of its software roadmap.
With the latest layoffs, Volkswagen hopes to make Cariad more agile and financially sustainable. The move reflects a growing trend among global automakers to reassess their software development strategies amid rising competition and technological advancements in the automotive sector.
