VW software subsidiary Cariad is planning to cut around 1,000 positions

The car manufacturer Volkswagen is in crisis. This also costs jobs at the software subsidiary Cariad. Around 1,000 jobs are said to be affected - but how the reduction will actually work is unclear.

The VW software subsidiary Cariad is facing major job cuts. Specifically, there are around 1,000 jobs that are to be eliminated, as company circles have revealed. This would affect almost a quarter of the approximately 4,300 remaining Cariad employees. It is still unclear by when and how the jobs will be cut. Negotiations will now be held with employee representatives. Collective agreements were also terminated. A Cariad spokesman declined to comment when contacted.

As the “Handelsblatt” reported, the company is said to have informed employees at a works meeting on Wednesday about, among other things, job cuts. This is necessary in order to maintain competitiveness compared to external software providers, it is said with regard to participants.

According to the report, the company is expected to cut its investments by around 6.1 billion euros from 2027 to 2031. At the beginning of the next decade, Cariad is also expected to contribute a further 400 million euros to the planned improvement in the Group's operating results. The board's future plan, which is intended to make the group more profitable by 2030, calls for billions in cuts in development budgets and the elimination of tens of thousands of jobs.

Cariad software used throughout the VW Group

Cariad's software solutions are used throughout the VW Group. The subsidiary was originally supposed to develop large parts of the software itself. Due to problems with important projects, which also delayed the launch of individual models, the car company replaced the Cariad leadership in 2023 and changed course.

Unlike his predecessor Herbert Diess, VW CEO Oliver Blume relies on cooperation with external partners such as Xpeng in China or Rivian in the USA when it comes to software. Cariad is now focusing, among other things, on the in-house development of key technologies such as driving dynamics software, cloud applications and infotainment systems.

The software subsidiary has already cut jobs several times in previous years. At the end of 2023, Cariad still had 6,500 employees. Most recently, the reduction was carried out in a socially acceptable manner through severance payments and early retirement programs. Terminations for operational reasons were ultimately ruled out until 2029.