Renault to Cut 3,000 Jobs Through Voluntary Exit Scheme Amid Cost-Cutting Drive

According to reports, the French automaker Renault intends to implement a voluntary redundancy scheme, which allows workers to opt out of the firm in exchange for a financial settlement rather than being fired outright, to lay off 3,000 workers globally, mostly in support positions. According to the French newsletter L’Informe, the final decision regarding the layoff is anticipated to be taken by the end of the year.

Why Renault Opted to Reduce the Workforce?

The layoffs are a part of an internal cost-cutting programme called “Arrow”, which aims to slash Renault’s staff in support services like marketing, finance, and human resources by 15%. Around 3,000 jobs are anticipated to be lost as a result of this goal at the automaker’s headquarters in the Boulogne-Billancourt area of Paris as well as other sites across the globe.

As per Reuters, Renault said that it is thinking about cutting costs but said that no definitive decisions have been made as of yet; therefore, it was unable to confirm any official statistics.

According to a Renault representative who replied to Reuters, “We confirm that we are considering ways to simplify our operations, speed up execution, and optimise our fixed costs given the uncertainties in the automotive market and the extremely competitive environment.” At the end of 2024, Renault had 98,636 employees across the globe.

Financial Outlook of Renault

This recent development comes after Renault’s financial report from July, which showed a net loss of 11.2 billion euros ($13 billion) for the first half of the year, including a write-down of 9.3 billion euros on partner Nissan. The company’s net income, excluding the write-down, dropped to 461 million euros, which was less than one-third of the profit recorded the previous year.

A weakening van market, the cost of electric vehicles, and growing commercial pressures from a more competitive environment were all blamed for this fall. Following Luca de Meo’s departure for Gucci-owner Kering in July, Francois Provost was selected as the new CEO, and analysts emphasised the crucial work that lies ahead for him.

The provost’s responsibilities include bringing Renault’s credit rating back to investment grade, recovering profits, and figuring out how the relatively tiny automaker can handle the effects of US tariffs and fierce competition, especially from Chinese automakers.