Auto industry ready to witness job losses and major skill transitioning - Just Auto
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Auto industry ready to witness job losses and major skill transitioning

28 Oct 2021

The transition to electric mobility has started impacting the employment structure in the automotive industry as a slew of OEMs and component suppliers have announced planned cuts to their employment numbers due to the shift to electrification. European OEMs are the most proactive on this front. Outside Europe an almost equally gloomy picture is painted.

Employment levels in the automotive sector are constantly under threat as OEMs and supplier seek to wring greater margins from their operations, while the economic and operational disruption from the COVID-19 pandemic has compounded the issues. In the ICE age, the systemic pressures were present due to increasing digitalization, automation and robotics – i.e. the transitioning to industry 4.0 to break away from the labor-intensive traditional model. The age of electrification, with vehicles that are simpler to manufacture due to fewer parts and without the need for such an expansive in-house and external powertrain value chain is precipitating new pressure on automotive employment.

Over and above these factors, there is also the angle of share mobility/subscription models that comes into the picture aiming to reduce car ownership over time and bring down parc and new sales. The factors suggest that job losses in the auto industry were already on the cards but the shift to electrification will deepen the magnitude of the employment woes.

Thus far the job losses that have the shift to electrification as the primary theme tally to nearly 70,000 among the OEMs. Looking into the supplier network a similar position is reported. In Europe alone, Robert Bosch and GKN have announced jobs cuts and plant closures due to the shift away from ICE powertrains. Unions in Europe predict that millions of jobs could be lost. With a VW analysis positing that 12% of the automotive workforce in Germany alone is threatened by electrification it’s easy to see how unions’ concerns could be scaled up to a sector that employs 14.6m people directly and indirectly in Europe according to ACEA.

There are ongoing debates on the intensity at which the jobs will be impacted. Several bodies across the globe have given their estimates The German Association of the Automotive Industry (VDA) estimates 215,000 jobs to be affected by 2030 in Europe and a report by the US-based Economic Policy Institute estimates the loss of 75,000 jobs by 2030 in the country. Germany’s National Platform Future of Mobility (NPM), a government advisory body, said in a report in early 2020 that more than 400,000 jobs in the country’s car industry could be gone by 2030 in a worst-case scenario involving a rapid switch to electric vehicles.

While on the flipside, some reports expect the job market to see major upskilling of the technical workers in OEM plants and the impact would be more on those working with component manufacturers for powertrain parts and ancillaries. Even so, it’s still a number that’s substantially comparable to those employed with automakers. Additionally, the race to replace powertrain manufacturing networks with battery gigafactories, e-motor facilities and related hardware and software will bring some upside. This is evident in the recent shortage of research and engineering specialists that major South Korean battery giants LG, SK and Samsung are grappling with.

However, there’s no escaping the fact that EVs are simpler to manufacture than ICE vehicles. Allied with automation shifting more to center stage in manufacturing a decline in the required manpower in the auto sector is inevitable. Automakers are getting future-ready with phased layoffs and related announcements. The industry would also see a transition in the kind of skillset required in the auto industry. Higher demand for skill across areas including chemical, material, electronics and IT is foreseen over mechanical jobs.


OEMTimelineAnnouncementEV Plans
HondaAugust 2021Over 2,000 Honda staff to apply for early retirement amid EV shift representing 5% of domestic workers.• Stop ICE Production and sell only EV/FCV by 2040. • All vehicles electrified in Europe by 2022
BMWJuly 2020The company management to cut 6,000 jobs in the core workforce and vacancies will not be refilled as the company accelerates transition to EVs.• Sell 25 electric models onto the market by 2023.
• Ban fossil-fuel cars by 2030.
• Carbon neutral by 2039.
DaimlerNovember 2019Daimler announced that it would be slashing at least 10,000 jobs globally to cut costs and help fund large investments for EV transition.• Sell 70% fewer combustion-powered vehicles by 2030 • Stop ICE production/carbon neutral by 2039
AudiNovember 2019The company stated that it plans to cut 9,500 jobs by 2025 to save Euro 6 billion in costs and be leaner and more sustainable.• Sell 20 models globally by 2025
• Carbon neutral no later than 2050
FordJune 2019The US automaker said it would cut nearly 12,000 jobs in Europe, of which 5,000 being in Germany as it aims to invest more into the EVs• Cease building combustion-powered vehicles in Europe by 2030 • 40% electric car sales globally by 2030 • Carbon neutral by 2050
NissanOctober 2021The company unveiled its Intelligent Factory at its Tochigi Plant that would reduce dependence on labor and shift entire EV assembly process to automation.• Carbon neutrality target: 2050
• 40% of US sales electric by 2030
RenaultSeptember 2021The automaker announced cuts affecting up to 2,000 engineering and support jobs in France as it shifts into electric cars and hires in different positions.• Dropping to just one petrol hybrid • and one diesel engine and launch 10 new EV models by 2025 • 65% sales in Europe to be EV by 2025 • Carbon Neutral in Europe by 2040
General MotorsNovember 2018GM announced it was to cut 14,000 jobs in North America as the company shifts towards making autonomous and electric vehicles from ICE vehicles.• Sell 30 new global EVs by 2025.
• Carbon neutral by 2040.
VolkswagenMarch 2019Announced plans to cut 5,000 to 7,000 jobs by 2023 to cut costs and boost its EV plans• 50% sales electric by 2030 • 100% electric by 2040 • Carbon neutral by 2050


  • By Bakar Sadik Agwan