Volkswagen plans to cut 1,600 jobs at its troubled Cariad software division by the end of the year, representing nearly 30% of the unit’s 5,900-person workforce. According to a report from Handelsblatt business daily, these reductions will primarily be implemented through redundancy programs.
The German automaker confirmed these moves in an emailed statement, framing the decision as part of a “transformation plan” for Cariad that was agreed upon in 2023.
“Last year, we already made the organisation more efficient as an internal software solutions developer with higher in-house performance and are now also adjusting the number of employees accordingly,” a Volkswagen spokesperson said.
VW’s software ambitions have come at a steep price. Cariad has reportedly lost $7.5 billion over last 3 years of operation, becoming a significant financial drain on the automotive giant.
VW Group’s software unit CARIAD lost $7.5 billion over the last 3 years. by X @AJ
Founded in 2021 under former CEO Herbert Diess, Cariad was originally tasked with developing a unified software platform VW.OS, that would power all the group’s brands. VW.OS was intended to address the challenges of electrification, connectivity, and autonomous driving technology.
The unit’s struggles with software development led to multi-year delays for key electric models from Porsche and Audi. These setbacks ultimately contributed to Diess being replaced as CEO.
His successor, Oliver Blume, quickly pivoted strategy, seeking partnerships with established suppliers like Continental. By June 2024, VW had turned to US electric vehicle startup Rivian for additional software expertise.
According to Handelsblatt, Cariad now plays only a minor role within the Volkswagen Group. Its primary responsibilities have been reduced to maintaining existing operating systems (E1.1 and E1.2) while the future software platform—internally called SDV 1.0—is being developed primarily through the Rivian joint venture.
Many Cariad developers have already transitioned to this new partnership arrangement, with the ID.Every1 electric small car set to become the first VW model equipped with the new software in 2027.
As Volkswagen continues to reorient its software strategy, these layoffs at Cariad mark a significant shift away from the company’s original in-house software ambitions.
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