European automaker Renault has announced plans to cut 15,000 jobs, shrink production and restructure its manufacturing plants as it responds to shrinking demand due to the coronavirus pandemic.
Renault detailed plans on Friday to find $2.22 billion U.S. in savings over the next three years. The French carmaker was under pressure before COVID-19 pandemic hit, posting its first loss in a decade in 2019.
The carmaker said it plans to trim its global capacity to 3.3 million vehicles in 2024 from four million currently, focusing on its most profitable models and areas such as electric cars while freezing manufacturing expansion in countries such as Romania.
The company is also bringing ex-Volkswagen executive Luca de Meo on board as its new Chief Executive Officer in July, and will reduce the number of subcontractors in areas such as engineering and the number of components it uses in its vehicles by shrinking gearbox manufacturing worldwide.
Renault’s stock has been among the worst performing on France’s blue-chip index in recent months. Renault, which is 15% owned by the French government, faces the most sensitive restructuring measures in its home country, where a third of its global job cuts will take place.
There will be a total of 4,600 job cuts in France, though Renault said it would prioritise employment transfers, voluntary departures and retirements.
In all just under 10% of Renault’s global workforce will be affected by the layoffs. Unions representing impacted workers have already vowed to fight the workforce reductions.
