Renault to cut 15,000 jobs worldwide

As part of a €2bn cost-cutting plan, Renault is cutting 15,000 jobs due to sales plunge because of the virus pandemic, news wires reported. The plan was announced by CEO Clotilde Delbos, who said cuts are needed in order to focus production on more profitable car models. On Thursday, Renault's strategic partner Nissan also unveiled huge job cuts.

Renault, which is 15% owned by the French state, said six sites are under review. The company is slashing costs by cutting the number of subcontractors in areas such as engineering, reducing the number of components it uses, freezing expansion plans in Romania and Morocco and shrinking gearbox manufacturing worldwide. The French firm plans to trim its global production capacity to 3.3 million vehicles in 2024 from 4 million now, focusing on areas like small vans or electric cars.

The company, which claims more than 4% of the global car market, said the plans would affect about 10% of its 179,000-strong global workforce and cost up to €1.2bn. Some 4,600 job cuts will be in France, and the firm said on Friday that it had begun talks with unions.

Renault is part of a three-way alliance with Nissan and Mitsubishi. Nissan has already announced it would close its factory in Barcelona with the loss of about 2,800 jobs in a bid to cut costs, prompting violent protests at the Spanish plant. Both Renault and Nissan were already facing falling sales before the Covid-19 outbreak worsened trading. Renault's sales were down 3% last year and the number of vehicles sold in the first three months of 2020 fell by 25%, before dropping further in April.

The firm is currently in talks with the French government over a €5bn emergency loan package. The French government has also pledged €8bn in wider rescue funds aimed at shoring up the country's car industry. In exchange, President Emmanuel Macron had said Renault should keep workers and production in the country.

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