The global automotive industry is facing massive workforce restructuring driven by the paradigm shift to electrification, software-defined vehicles (SDVs), and the introduction of AI-based robotics. Amid this upheaval, Hyundai Motor (005380.KS) finds itself in a unique position: roughly 40% of its domestic blue-collar workforce is scheduled to retire naturally over the next seven years. Analysts suggest the company has entered a “golden time” where it can transition to a future workforce structure through generational change rather than forced layoffs.
According to Hyundai Motor’s labor union on the 13th, a total of 9,525 technical (production) workers affiliated with the union are scheduled for mandatory retirement between this year and 2032. This figure approaches 39% of the current unionized technical workforce of approximately 24,500, meaning a significant portion of the company’s on-site personnel will naturally leave the company within the next seven years. By year, the exodus begins with 2,024 retirees this year, followed by 1,706 in 2027 and 1,722 in 2028, with more than 1,000 large-scale retirements scheduled annually through 2030.
This “retirement rush” stems from the mass hiring that occurred during the high-growth era from the late 1980s to the early 1990s, coinciding with the expansion of the Ulsan plant and the completion of the Asan plant. These workers are now simultaneously reaching retirement age. The rapid aging of the on-site workforce was further accelerated by the company’s de facto suspension of open recruitment for technical positions for about a decade starting in 2013, resulting in a specific generation hitting the retirement threshold all at once.
In the traditional manufacturing era, most retiring workers would have needed to be replaced with an equal number of new hires. However, the situation is fundamentally different now. The expansion of production process automation and physical AI robots, combined with the simplification of vehicle architecture—where electric vehicles and SDVs replace complex mechanical components like engines and transmissions with electric motors and batteries—means the workforce required to maintain the same production volume is steadily decreasing. Consequently, while Hyundai Motor resumed open recruitment for technical positions in 2023, the hiring scale is being managed at a level of just a few hundred annually, less than half of the yearly retirements.
Global automakers are already executing far more severe restructuring measures. Germany’s Volkswagen has decided to cut over 100,000 jobs, representing 15% of its global workforce of 657,000, and close four plants in Germany. Mercedes-Benz is negotiating the sale of a German plant to defense contractor KNDS to cut costs, while Audi plans to reduce its workforce by 7,500 by 2029. Japan’s Nissan is pursuing its “Re:Nissan” project, which involves cutting 20,000 jobs—15% of its global workforce—alongside domestic plant closures and the withdrawal of electric vehicle development plans. U.S. automaker General Motors (GM) cut 11,000 jobs between 2022 and 2025, announced an additional 3,000 cuts in March of this year, and temporarily laid off 1,300 workers at its “Factory Zero” EV plant in Michigan, installing 50 assembly-line robot arms in their place.
A common factor behind these restructurings is the astronomical investment costs required for the transition to EVs and AI-based autonomous driving, coupled with a sharp decline in workforce needs due to the adoption of physical AI. The automotive industry, once the epitome of manufacturing, is rapidly transforming into an AI technology sector.
Amid this global trend, Hyundai Motor has been improving its employment structure by changing the “composition” of its workforce rather than just the “quantity.” According to Hyundai Motor’s Sustainability Report, the number of domestic employees, which had risen to 75,137 in 2024, fell to 72,598 last year—the first decline in five years. In contrast, research and development (R&D) personnel steadily increased from 20,008 in 2024 to 20,599 last year. The analysis suggests the company is reshaping its workforce portfolio by reducing the proportion of production workers and expanding personnel in R&D and future technology fields to secure leadership in electrification, SDVs, and autonomous driving.
A Hyundai Motor official explained, “This is a process where the human resource composition by job category is changing due to the paradigm shift in the automotive industry. While on-site production personnel are decreasing, research positions related to future vehicles are increasing, keeping the total headcount steadily above 70,000.”
However, during this structural transition, the Hyundai Motor labor union has launched a three-day partial strike starting on the 13th, demanding a performance bonus equivalent to 30% of net profit, an extension of the retirement age, and employment guarantees related to the introduction of AI robots. The strike front is spreading across the group, with unions at major affiliates such as Hyundai Mobis (012330.KS) and Hyundai Rotem (064350.KS) also pressuring management in wage and collective bargaining negotiations. This stands in stark contrast to the drastic restructuring involving mass layoffs and plant closures underway at Volkswagen and Nissan.
Cho Chul, a senior research fellow at the Korea Institute for Industrial Economics & Trade, stated, “The Hyundai Motor Group has been relatively outperforming, but if labor costs increase and the smart factory system is delayed, it will not be easy to close the competitiveness gap with China.” He added, “From the company’s perspective, they may ultimately reduce domestic production and increase overseas production, which could make additional domestic hiring even more difficult, so continuous efforts to persuade the union are necessary.”
Meanwhile, the rapid advance of Chinese automakers is another major factor pressuring restructuring across the global automotive industry. Chery Automobile has acquired the Rosslyn plant and site in South Africa vacated by Nissan, while BYD is pursuing the acquisition of a second European plant following its Hungarian factory, which is set to begin production at the end of this year. In the first quarter, overseas sales of Chinese finished vehicles reached approximately 2.22 million units, a 56.7% increase year-over-year.
Industry observers point out that this massive mandatory retirement cycle should be treated not merely as an opportunity to cut labor costs, but as a new turning point in labor-management relations. The negotiation agenda, which has so far focused on “how many more to hire and how much more to raise base pay,” must expand to include job transition training, AI capability enhancement, and the establishment of new compensation systems. In fact, Japan’s Toyota has decided to make the reform of its wage and evaluation system—reflecting roles, contributions, and productivity improvements rather than seniority—a key agenda item in its 2025 spring labor-management consultations.
Lee Hang-koo, a research fellow at the Korea Automotive Technology Institute, emphasized, “The era has arrived where employment patterns in the automotive industry are shifting from simple production jobs to software and service-oriented roles. Analyzing the ripple effects of robot adoption on production sites and finding a workforce structure and compensation system fit for the future is a core task for both labor and management.”