France’s Renault has announced some 7,500 layoffs by 2016 as the floundering company seeks to sharpen its competitive edge.
Renault said on Tuesday that it has settled with unions over making 5,700 redundancies through natural attrition after making employees retire three years earlier.
“If an agreement is signed with unions, this staff redeployment would require neither a plant closure nor a voluntary redundancy program,” Renault Head of Operations in France Gerard Leclercq said.
The company says the 17 percent workforce reduction will contribute to saving 400 million euros through spending cuts, which will give Renault “room for investment and development of its activities.”
The layoffs come in a bid to make Renault more competitive to European and worldwide markets by hiring employees with “critical skills.”
“On the basis of a progressive recovery of the European market, establishing such an agreement would allow for growth in French output that is more sustained than that of the European market” as a whole, Renault said in its forecast.
The “staff redeployment” has already gone ahead in Renault’s division in the debt-stricken country of Spain.
According to new data released by the French Constructers’ Committee of French Automobiles (CCFA) in November 2012, the country’s car sales plummeted 13.3 percent in the first 10 months of last year.
French automakers have tried to solve their economic problems by slashing capacity and cutting costs.
The worsening debt crisis has forced EU governments to adopt harsh austerity measures and tough economic reforms, which have triggered incidents of social unrest and massive protests in many European countries.
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