Peugeot to widen job cuts
PSA Peugeot Citroen plans to cut as many as 2,450 additional jobs next year through incentives such as early-retirement packages as Europe’s second-largest carmaker restructures.
The plan, detailed in an internal document obtained by Bloomberg, comes on top of Peugeot’s goal of eliminating 11,200 jobs in France, or 17 percent of the company’s domestic workforce, by the end of this year. The deeper cuts show that Peugeot’s turnaround efforts are still ongoing, even after it reported its first profit in three years in the first half.
According to the document, Peugeot wants 1,500 people in the French auto division to accept early-retirement deals and aims to cut another 950 positions in those operations through a program that allows employees to try their luck elsewhere. If new businesses or jobs at other companies don’t work out, Peugeot will agree to hire them back after two years. Jean- Baptiste Thomas, a spokesman for the Paris-based company, declined to comment on personnel plans.
Employees taking part in the early retirement program will be allowed to work part-time at Peugeot for two to three years at 70 percent of their full-time pay before leaving the company, according to the document. The early-retirement plan for next year comes after 2,139 people signed up for the program through the end of September this year.
Under Chief Executive Officer Carlos Tavares, Peugeot’s restructuring efforts have shown signs of traction. The Paris- based company, which sold shares earlier this year to the French government and China’s Dongfeng Motor Corp., expects to reach a target of positive cash flow in 2014, two years ahead of plan.
Cutting personnel expenses has been a big part of the company’s savings efforts. A labor agreement signed in October of last year freezes pay and sets terms for work-hour flexibility. In return, the company promised to refrain from large-scale firings in France.
Still, Peugeot’s not just getting rid of people. The French carmaker plans to hire 550 employees under permanent contract in its auto division in France next year, according to the document. It’s hired 95 people so far this year. Peugeot meets with labor representatives at an extraordinary works council meeting scheduled for next week.