On 26 October 2011, the French car manufacturer PSA Peugeot-Citroën announced to its European Works Councils that it would make 4,300 job cuts in 2012, as part of a recovery plan to save 800 million euro in 2012. Half of the cost reductions will be achieved by 5,000 job cuts in Europe, including 3,500 within the PSA group (2,500 in administrative, organizational and commercial staff; 1,000 in production and 800 temporary workers) and 2,500 by subcontractors in engineering and IT services.
The group finalized a recovery plan in 2009 with investments and cost cutting measures of up to €1.1 billion per year, but at that time management expected greater sales in 2011 and 2012. With the market still stagnating in Europe, in particularly in Southern Europe where PSA has its main facilities, the group decided to amend its recovery plan. PSA's CEO expects a decrease in the European market of 17 per cent in comparison with the situation in 2007.
The CEO explained that there will be no compulsory dismissals. The Group will deploy support programmes in each country, in line with the retraining, transfer and outplacement provisions of the Human Resources Planning and Development agreement signed with employee representatives in March 2010. In particular, internal posts lost through natural attrition will not be replaced. Concerning the 2,500 other jobs outside the company, the group will terminate outsourcing contracts with external companies, whose positions could be in part filled by group employees, explained PSA.