Volkswagen's Software Division Overhauls Operations Amidst EV Platform Delays

Volkswagen Group's latest strategic move involves a significant reduction in workforce at its software unit, Cariad, with 2,000 jobs slated for termination according to a report by insideev's and originally reported by German publication manager magazin

This decision is part of a broader restructuring strategy aimed at refining the company's focus on future electric vehicle (EV) platforms. The board has endorsed these changes, which are expected to unfold from 2024 through the end of 2025.

The restructuring is set to impact the launch timelines of key software architectures. Notably, the 1.2 software architecture, essential for the Porsche Macan EV and Audi Q6 E-Tron, is now projected to face a delay of over a year. The more advanced 2.0 architecture, which was anticipated to be introduced in 2025, is now being redesigned from the ground up.

The delays extend to the Scalable Systems Platform (SSP), a foundational architecture for a broad spectrum of EVs within the VW Group, which is also undergoing redevelopment. This platform is crucial for the integration of software and hardware in compact cars and high-performance vehicles alike.

Despite the delays, the works council, which has secured job guarantees until mid-2025, must still approve the restructuring plan. The council has raised concerns regarding the specifics of the proposed job reductions.

Cariad, established in 2019 to unify software development across VW Group's EVs, has faced challenges, including budget overruns and missed launch targets. These issues have prompted a reassessment of leadership, with Peter Bosch now spearheading a comprehensive transformation plan since his appointment earlier this year.

The software complications have been a notable issue for Volkswagen, with customers reporting operational glitches in models like the ID.3, ID.4, and ID.5. These setbacks have placed VW Group's software development under scrutiny, especially as competitors in the German, American, and Chinese automotive markets forge ahead with integrated software systems that are critical for EV functionality.