Layoffs at VW's Cariad further delay software launch in Porsche, Audi models

Volkswagen's software unit Cariad will delay the launch of its new software architecture yet again as it deals with a large round of layoffs.

Just three years after VW created Cariad, and only six months after an executive shakeup, the unit has planned to cut 2,000 jobs, German publication Manager Magazin reported over the weekend. The layoffs will further delay the launch of VW's software architecture 1.2 by 16 to 18 months.

The software 1.2. platform, which is being developed for the Porsche Macan EV and the Audi Q6 E-Tron, was originally scheduled for completion in 2022. Cariad pushed the release date to the end of 2023 to be ready for 2024 VW models when Peter Bosch took over in May. Now, it looks like the software 1.2 platform won't be in cars until at least 2025.

On Monday, Porsche signaled that it wouldn't wait around for version 1.2 forever. The brand said future models would have Google built-in, which relies on the Android Automotive operating system to integrate Google services like Maps, Assistant and other apps directly into the vehicle.

In March, Cariad announced a new app store that was meant to launch in select Audi vehicles this summer and eventually expand across VW's lineup, including Porsche.

VW's vehicles today already have the software 1.1 version installed. Cariad is also working on a 2.0 version, an operating system designed for all VW Group brands. The 2.0 architecture was initially slated for a 2025 launch, but given the recent layoffs, Cariad will now redevelop the software from scratch.

VW didn't say whether these layoffs would push out the release date for the Macan EV itself, which is slated for early 2024. Volkswagen did not respond in time to clarify.

The Manager Magazin report said the restructure will also impact the next-gen Scalable Systems Platform, an architecture that VW hopes to use for EVs across its lineup, from VW hatchbacks to sporty Porsches.

VW has long struggled to launch software in its vehicles, which puts it on the back foot when competing with the software-defined vehicles popularized by Tesla and embraced by Ford and General Motors. In addition to creating smarter cars, software-defined vehicles offer automakers an opportunity to add revenue streams via in-car entertainment and services. In 2021, VW Group said Cariad could generate as much as €1.2 trillion ($1.4 trillion) in revenue by 2030, via subscriptions and other sales.

A series of missteps and delays have caused various shakeups at Cariad. Most recently in May Cariad’s board replaced its CEO Dirk Hilgenberg with Bosch, who was previously responsible for manufacturing at VW’s Bentley brand. Bosch oversaw the slashing of 2,000 staff members as part of a broader restructuring plan, Reuters reported.

According to reports, VW Group's board of directors has approved the downsizing, which will occur between 2024 and the end of 2025. The plan still requires approval from VW's works council, which has guaranteed jobs for workers until mid-2025.