French carmakar PSA Peugeot Citroen has announced job cut of whopping 8,000 employees in addition to the shutting down of an assembly unit in its home country. Europe's second largest carmker after Volkswagen, PSA has been has been struggling to deal with mounting losses at the core automotive division.
Peugeot will close its Aulnay plant near Paris in 2014 as part of the company's move to reorganize its under-used domestic production capacity. The Aulnay plant employs more than 3,000 workers.
Another factory in Rennes, western France, will shed 1,400 of its 5,600 jobs as it downsizes in response to shrinking demand for larger cars such as the Peugeot 508 and Citroen C5. Some 3,600 non-assembly jobs will also be scrapped across the company.
Peugeot Chief Executive Philippe Varin said in the company's statement: "I am fully aware of the seriousness of today's announcements. The depth and persistence of the crisis impacting our business in Europe have now made this reorganisation project indispensable."
Peugeot had announced 6,000 job cuts last year which included 2,500 external positions at subcontractors and service providers. Peugeot's core auto division swung to a loss last year and has deteriorated since, as the Peugeot and Citroen brands lose ground to competitors in a shrinking European market.
Unlike Volkswagen, the French automaker is heavily exposed to southern European markets worst hit by the region's debt crisis, and lacks its German rival's export success as well as the support of a low-cost brand like Renault's Dacia.
Earlier, there were reports that PSA Peugeot Citroen would enter the Indian market by manufacturing cars with General Motors, which is the company's new alliance partner. Later, the carmaker had stated that they are not taking the partnership to the Indian market. Anyhow, signs are that we will have to wait for more years to see a PSA car around.