PSA Peugeot Citroën to Cut Another 1,500 Jobs in France
The French carmaker is preparing further redundancies on top of 11,200 previously announced, as overcapacity and weak demand continue to pressure its domestic operations.
PSA Peugeot Citroën is preparing to cut a further 1,500 jobs in France as part of a continuing effort to address overcapacity and persistent weak demand in its home market. The planned redundancies come on top of the 11,200 French job losses previously announced under the group’s restructuring plan, according to union sources.
Jean-Pierre Mercier, a representative of the CGT union at PSA, said internal sources estimate the company is overstaffed by about 1,500 positions in France. The company is expected to pursue voluntary redundancies rather than compulsory layoffs, but the move has already drawn criticism from union representatives who have clashed with management over previous cuts.
The latest reduction is part of a series of workforce cuts that have seen PSA’s French headcount shrink sharply since 2012. In July that year, the company announced plans to cut 8,000 jobs and close the Aulnay plant near Paris, which employed around 3,000 workers. Further cuts followed, bringing the total to 11,200 by 2015. The closure of Aulnay and other restructuring measures met strong opposition from unions and led to legal challenges, none of which succeeded in halting the process.
Restructuring amid weak European demand
PSA’s decision to deepen job reductions reflects ongoing difficulties in the European car market, where sales have struggled to recover from the post-2008 slump. The company has cited overcapacity in its French plants and continued uncertainty in demand as the main drivers for these measures. PSA’s management has also pointed to the need to control labour costs and streamline operations to return to profitability after coming close to bankruptcy in 2014.
Since 2013, PSA has announced a series of annual job cuts, with more than 17,000 positions eliminated over three years. The French state and Dongfeng, a Chinese manufacturer, each hold a 14 percent stake in PSA following the government-backed bailout that helped stabilise the company. Despite returning to profit in 2016, PSA has maintained a cautious approach to restructuring, citing factors such as Brexit uncertainty and declining diesel sales as reasons for ongoing caution.
Union response and future outlook
Labour unions have condemned the new wave of cuts, describing the continued reduction in French jobs as a scandal. The CGT union has been particularly vocal, having previously opposed the closure of Aulnay and other measures. Management has indicated that the latest cuts will focus on voluntary departures, but unions remain sceptical about the impact on workers and communities.
The restructuring at PSA Peugeot Citroën is part of a broader trend among European carmakers facing slow demand and the need to adapt production capacity. While PSA’s management has stressed the importance of financial stability and competitiveness, unions and workers continue to bear the brunt of the industry’s adjustments.
