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Renault's cost reduction plan encounters obstacles, France agrees to leave insufficient number of employees

by:Yisheng      2021-06-03

According to foreign media reports, Renault’s goal of reducing the number of French employees has been hindered due to the small number of employees accepting the voluntary resignation plan, which is a key component of the company’s cost reduction plan.

(Image source: Renault)

Guillaume Ribeyre, a representative of the CFE-CGC union, said that only about 300 employees have accepted the plan, which is far below the company’s goal of layoffs of 1,900. In December last year, Renault began to provide incentives for workers to leave. Workers who intend to participate in the project need to accept it before September this year. A Renault spokesperson declined to comment.

Renault’s high employee salaries are one of the many challenges facing its CEO Luca de Meo. Affected by the epidemic, car sales in the company's largest market, Europe, have fallen sharply, causing Renault's annual loss to hit a record high. In May last year, the company announced its plan to turn losses into profits, aiming to cut 14,600 positions worldwide.

According to this plan, Renault needs to cut a total of 4,600 positions in France through a voluntary resignation plan negotiated with the union, plus early retirement and natural layoffs. Last month, Renault Deputy CEO Clotilde Delbos said that the company was 'going well' on the plan, but declined to give details.

Renault employees’ reluctance to leave their jobs reflects people’s anxiety about their job prospects during the global health and economic crisis. French car lobby group La Platforme Automobile said that last year, the French automobile industry lost a total of about 16,000 jobs, and it is expected that this number will rise to 60,000 within 3 to 5 years.

Renault issued a warning to investors last month, saying that due to the epidemic and chip shortages affecting global car production, 2021 will also be a very challenging year. Last week, Renault unexpectedly sold all its 1.5% Daimler shares in order to reduce debt.

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