Wolfsburg. When it comes to cost targets at Volkswagen, Peter Bosch is often seen as one of the first to deliver. At the beginning of 2025, the head of the software subsidiary Cariad announced job cuts in the group after the major collective bargaining agreement: around 30 percent of the jobs would be eliminated. The unit now employs around 4,300 people. Now the next break is imminent.
According to information from Handelsblatt from corporate circles, Cariad is planning to cut around 1,000 more jobs. That would be almost a quarter of the remaining workforce. It is still unclear when the dismantling will be completed and which instruments will be used to implement it. A Cariad spokesman did not want to comment on the information when asked by Handelsblatt.
At a works meeting on Wednesday, the company is said to have informed the workforce about the next course of action. Additional staff cuts are also said to have been discussed. Participants at the meeting said that this is necessary in order to maintain competitiveness compared to external software providers. Negotiations with the employees are still pending.
Cariad has also terminated several collective agreements in order to renegotiate regulations. Management is also preparing such steps at the Volkswagen brand.
According to an internal paper available to Handelsblatt, Cariad is expected to reduce its investments by a total of around 6.1 billion euros between 2027 and 2031. In addition, the company is expected to contribute a further 400 million euros to the targeted improvement of the Group's operating results at the beginning of the next decade. To this end, Cariad's tasks should be further focused. A detailed concept should be available by the end of December 2026.
At the end of 2024, Volkswagen sealed a comprehensive software partnership with the US electric car maker Rivian. Since then, Cariad has played a smaller role in the development of future vehicles. The new electronics and software architecture, internally called SDV, is primarily being developed in a joint venture with Rivian.
The infotainment for the new software also comes from the Rivian joint venture. Cariad, on the other hand, continues to maintain the existing group operating systems E1.1 and E1.2 and will keep the versions fresh for a few more years. The CEA software architecture for the Chinese market is also a product of Cariad in China.
Cariad is also planned for the group's in-house development of key technologies, such as driving dynamics software, cloud applications and autonomous driving. But here too there have been changes recently.
The “Automated Driving Alliance” between Cariad and supplier Bosch ended this summer. The cooperation, which started in 2022, was intended to bring automated driving functions to the mass market and was originally planned until at least 2029. Around 500 employees were employed at Cariad. These positions are now likely to come under pressure. In addition, Cariad is currently examining how efficiencies can be increased using artificial intelligence. It is still unclear what personnel requirements will result from this.
One thing is certain: future assistance systems for higher levels of automation will be developed in-house with a new AI partner. Insiders name the British start-up Wayve as the most promising cooperation candidate. According to information from company circles, a chip deal with Nvidia is also planned. The package could be sealed this year.
Cariad repeatedly had to serve as a scapegoat within VW when cars arrived late or agreements were not kept. However, the problems cannot be blamed solely on the software subsidiary. It was supposed to develop several software architectures in parallel and at the same time meet the different requirements of VW, Audi and Porsche. Changing specifications and competing wishes from the brands made the order more difficult. The employees also had to bear the consequences of corporate management that wanted too much at the same time.
There has recently been a dispute within the company about Cariad's role. “Manager Magazin” reported on an internal analysis that fundamentally questioned the brands’ collaboration with the subsidiary. The group said that such a paper had not been discussed by the group's board of directors or the Cariad supervisory board.
