2 hours ago
539
Renault, a French automobile manufacturer, has announced plans to reduce its workforce by 3,000 jobs through a voluntary redundancy program for workers in support roles, according to a report from French newsletter L’Informatique dated Saturday, October 5.
Examples of the support areas Renault intends to reduce by 15% include human resources, finance, and marketing. This is part of the company’s cost-saving project known as “Arrow.”
The reduction is anticipated to result in approximately 3,000 job losses at the firm’s headquarters in Boulogne-Billancourt, near Paris, and at other locations worldwide.
This development follows the introduction of a commercial version of the French automaker’s new Renault 4 E-Tech crossover. Still, you would be hard-pressed to identify it as a work vehicle at first glance. Called the Societe, this new line of electric cars for professionals skips the traditional van look in favor of something much more subtle.
Renault plans to reduce its workforce by 3,000 jobs amid cost-cutting measures
Regarding the workforce reduction, the French newsletter cited a source with knowledge on the topic of discussion, which is close to the company, revealing that a final decision could be made by the end of this year.
When reports requested that Renault comment on the situation, the car manufacturer confirmed that it is exploring cost-cutting measures. However, the company stated that no specific number has been decided on since they have not yet finalized this decision.
According to a spokesperson for Renault, the firm has embraced this approach due to increasing uncertainties in the automotive market and the intense competitive nature of the industry. “Therefore, we are looking into ways to streamline our operations, improve execution speed, and lower our fixed costs,” the spokesperson added.
The total number of Renault’s workforce in 2024 was 98,636 employees globally. In July, the car manufacturer announced a net loss of € 11.2 billion, roughly equivalent to $13 billion for the year’s first half. This included a €9.3 billion write-down related to its partner, Nissan.
Notably, without this write-down, the net income would have decreased to € 461 million, which is lower than one-third of the previous year’s. This drop resulted from a weaker van market, increased costs related to electric vehicles, and pressure from swift industry competition.
Renault faces significant challenges in its operation
Analysts have raised concerns about how Renault’s CEO, François Provost, manages the company’s profit margins. According to them, Provost, who replaced Luca de Meo in July when the owner of Gucci Kering poached him, needs to address profit margins as soon as possible.
They also highlighted that he needs to work to bring Renault’s credit rating back up to an investment grade, while figuring out how the relatively small car company can survive US tariffs and stiff competition from Chinese rivals.
This issue was raised after reports from sources revealed that although Renault has been largely protected from US tariffs, as it does not have a footprint there, it has been indirectly hit by greater commercial pressure as European rivals seeking new markets outside the United States step up efforts to sell in its home region of France.
In the meantime, the company reported zero growth in second-quarter sales volume and cautioned that sales performance was weak in June. It also faces increasing competition from Chinese newcomers in the electric car and hybrid markets.
Barclays analysts suggest that Renault may have experienced slower price-mix momentum during the first half of the year. The company is due to announce full first-half results soon.
Get up to $30,050 in trading rewards when you join Bybit today
English (US)