PSA/Peugeot-Citroen will remove as many as 10 percent of its French workforce in 2012 in order to create further savings amidst a slowdown in sales, Christian Lafaye, head of the FO union, told Bloomberg News. Lafaye divulged that PSA will increase its job cuts in France to 8,000-10,000, which is double the number of the carmaker’s previously announced 4,000 layoffs.
Local daily Les Echos reported that the job cuts in France will affect 1,500 to 2,000 workers at PSA's Aulnay plant and around 600 employees at its Sevelnord joint venture plant with Fiat and at its Rennes site. At the end of 2011, PSA employed 100,356 people both on permanent and temporary contracts in France.
PSA also employed 209,019 workers around the world at the end of 2011. According to Franck Don, a CFTC union representative, PSA chief executive Philippe Varin told unions last week that the automaker has to increase its 2012 savings target of EUR1 billion ($1.26 billion). PSA is currently restructuring its operations to save money after its net debt ballooned to EUR3.4 billion at the end of 2011.
PSA’s money-saving efforts included seeking job cuts as well as conducting fund-raising activities like selling its headquarters building and issuing EUR1 billion in shares at a 42 percent discount. PSA also forged an alliance with General Motors Co. aimed at cutting purchasing costs and development spending. The deal entailed GM acquiring a 7-percent stake in PSA.