Breaking News! VW to Fire Most Executives at Software Unit Cariad

Published: May 8, 2023 15:21

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According to foreign media reports, a person familiar with the matter has revealed that the VW Group will fire most of the executives of its software division, Cariad, next week in an attempt to resolve development issues.
It is reported that only personnel chief Rainer Zugehör will likely remain in the Cariad division, with all other executive directors to be fired, and the Cariad supervisory board is expected to approve the layoffs at a meeting next week.
Founded by former VW Group CEO Herbert Diess, Cariad, VW's software division, is currently over budget and failing to meet development targets, with production of two important new models, the Porsche e-Macan and Audi Q6 e-tron, delayed as a result. Delays in software development and cost overruns also contributed to Diess' departure in September last year, before the division was taken over by Oliver Blume, the new chief executive of the Volkswagen Group.
When Oliver Blume took over, he ordered an evaluation and restructuring of Cariad's strategy, at which time VW had said that Cariad was not planning to make redundancies, but would refocus on efficiency issues. Now that most of the executives have been laid off, it must be that the strategic adjustment process is still not going well.
The Cariad, a central part of the VW Group's plans to catch up with Tesla in the coming years, has been difficult. VW originally planned to have its entire fleet equipped with a new software platform designed to enable "L4" autonomous driving in 2026, but the release of the platform has since been delayed until 2030. According to the Volkswagen Group's 2022 financial report, Cariad will have revenues of €800 million and an operating loss of €2.1 billion in 2022.
A VW spokesperson revealed that the company is analysing Cariad and its projects and that some decisions have been made, but no decision has yet been taken on staff dismissals. The spokesperson stressed, however, that Cariad and automotive software development remain an important part of the VW Group's strategy.

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