The automotive supplier Valeo announced on Tuesday that it had cut 12,000 jobs worldwide in the first half of the year, including nearly 2,000 in France, to reduce costs and adapt to the drop in sales caused by the health crisis.
Read also: Valeo: net loss of 1.21 billion euros in the first half
These workforce reductions have affected “all regions of the world,” CEO Jacques Aschenbroich explained during an audio conference with journalists. In Europe, where "a little more than 4,000" jobs have been cut, including "a little less than 2,000" in France, there were, however, no redundancies. These are mainly temporary contracts that have not been renewed, the company said.
28% decrease in turnover
Valeo, a specialist in electric powertrains and driving assistance for the automobile, on Tuesday published a net loss of 1.2 billion euros from January to June. Turnover fell 28% in the first six months of the year, to 7.06 billion euros. “The cost reduction programs (...) are a reaction to the appalling market conditions,” explained Jacques Aschenbroich. Valeo, which has estimated the savings linked to the downsizing at 248 million euros, estimates that the automotive market will be permanently affected by the Covid-19 pandemic. The job cuts are part of a savings plan of 570 million euros carried out during the first half of the year. This plan also includes a reduction in research and development efforts of 196 million euros and a reduction in general expenses of 97 million euros.
The company is also engaged in negotiations with the social partners in France to improve its competitiveness. According to Valeo's CFDT, management has put on the table several measures including the cancellation of the incentive, a reduction in leave, or a salary freeze and even a reduction in basic compensation for engineers and executives . Asked this Tuesday, Jacques Aschenbroich declined to comment on these ongoing discussions.
