Stellantis announces workforce reductions due to electric car transition

Francesco Armenio
Stellantis has announced several workforce reductions due to cost cutting in preparation for the transition to electric vehicles.
Stellantis Melfi Plant factory

Electric cars have production costs that are 40 percent higher than regular combustion cars. For this reason, Stellantis has decided to make several staff cuts at its plants around the world to reduce the company’s costs and making it more competitive ahead of an electric-only future.

Stellantis cuts staff to reduce costs ahead of production of new electric cars

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The latest staff cut was announced a few days ago, when Stellantis announced plans to lay off 400 white-collar workers in the United States by March 31. This will probably not be the last cut the automotive group led by Carlos Tavares will make during 2024. In the United States, the Group has offered more than 6,400 early retirement incentive packages, with the aim of reducing staff without making layoffs. The reason is due to electric cars, which have fewer components and therefore require fewer staff for their production.

However, the decline in global demand for electric cars in this early 2024 is causing much concern among executives of major automakers. There also remains the unknown of what might happen with future general elections in the United States and Europe, which could further slow the transition to electric cars.

It is thought that the plants most affected by these layoffs, besides the United States, will be those in Italy such as Mirafiori, Melfi and Cassino. The Mirafiori plant in Turin has been struggling for months, with the production line limited to a single daily shift due to low demand for the Fiat 500e, which recently made its U.S. debut, and Maserati.