In the Berlin offices of Cariad, spread over three sites in a bend of the Spree, in the Charlottenburg district, the voluntary departure program is in full swing. The subsidiary of the Volkswagen group, entirely specialized in the creation of software, intends to reduce its internal development costs by 20%. Berlin, one of Cariad's major urban showcases in Germany, is expected to lose scale.
When it created its subsidiary in 2020, Volkswagen thought that the vibrant German capital would be more attractive than its old headquarters in Wolfsburg (Lower Saxony) for young international IT talents. Nothing was too good to support the major project of the leading European automobile manufacturer: to become “the largest software group in Europe after SAP”with 10,000 employees, according to the vision of the former boss of Volkswagen, Herbert Diess.
Four years and several restructurings later, Cariad is a field of ruins. The company, supposed to deliver on-board software for all the group's cars, suffered an operational loss of 2 billion euros over the first three quarters of 2024, after 2.4 billion in 2023. The final damage could reach 30 billion euros, due to delays and the investments planned to make up for them, estimates the very informed Manager Magazine.
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The accumulated losses already make Cariad Volkswagen's biggest industrial disaster since the rigged diesel engine affair in 2015. The story is emblematic of the failure of the Wolfsburg giant in one of the major revolutions in the sector: the piloted vehicle. by the software. In other words, a “smartphone on wheels”, capable of remote updates, integration with digital platforms, vehicle personalization and soon autonomous driving. Like the model at the time, Tesla.
“They thought they could build a software factory like you build a car factory, from the top down!” »says an IT specialist familiar with Cariad, who prefers to remain anonymous. “They invested a lot of money and personnel at the start, too much, without giving people time to integrate and develop a common culture. Add to this the complexity of the demands in terms of brands, vehicles and services, failure was planned”he continues.
The decline of the sedan
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