Another Blow to the Car Industry as French automaker Renault announces 15,000 job cuts Worldwide

French automaker Renault announced on Friday that it plans to cut 15,000 jobs worldwide as part of a €2 billion ($2.2 billion) cost-cutting plan to cope with reduced sales over the next three years.

INTERIM CEO Clotilde Delbos said in a statement. “In a context of uncertainty and complexity, this project is vital to guarantee a solid and sustainable performance.”

It is a huge move for the company as April losses from the coronavirus crisis caused an unprecedented 90 per cent drop in the French car market for new vehicles.

Under the plan, which was outlined for unions on Thursday evening, around 4,600 of those jobs would go in France, where 48,500 of its staff are based. the cuts would affect just under 10 per cent of Renault’s overall workforce of 180,000 employees.

“We want to generate economies of scale to restore our overall profitability and ensure our development in France and internationally,” the statement read. The French government is the principal shareholder in Groupe Renault, holding a 15.01 per cent capital stake (Nissan holds a 15 per cent stake). On Tuesday, President Macron announced an €8 billion stimulus plan to aid the auto industry, part of which was a €5 billion state-backed loan for Groupe Renault. The loan will be concluded next week after final decisions on layoffs are made.

The manufacturer had hoped to introduce the reduction in staff without redundancies, through a voluntary departure plan and a retirement scheme, consultations with staff representatives in France are expected to start from next month.