BERLIN (Reuters) – Carmaker Volkswagen plans to cut up to 4,000 jobs at its plants in Germany by offering early or partial retirement to older employees in a move that could cost several hundred million euros, they reported on Sunday company sources.
Volkwagen said in a statement that it had agreed a plan with the works council to open partial retirement to those born in 1964, while offering early retirement to those born from 1956 to 1960.
Volkswagen said it expected up to 900 workers to opt for early retirement, while a low number of thousands would choose partial retirement, without giving an accurate figure.
Two company sources told Reuters that 3,000-4,000 positions will be reduced in relation to the program to be implemented at the six German plants of the major VW brand, which now employ about 120,000 people.
The Handelsblatt newspaper, which previously reported on the plan, had said the company would cut up to 5,000 jobs.
Volkswagen declined to comment on the cost, which will depend on the number of employees accepting the offer. One source estimated it at about 500 million euros ($ 598 million).
As the 83-year-old carmaker tries to become a technology company based on Tesla’s model, Volkswagen said it was increasing the training budget by 40 million to 200 million.
Volkswagen said it was also extending a hiring freeze until the end of 2021. Previously it had only been in place until the first quarter. External contracts can only be done in areas such as electric cars, digitization and battery cell development.
The Volkswagen Group said in January that it would reduce overhead costs by 5% and acquisition costs by 7% over the next two years.
Report by Jan Schwartz, written by Emma Thomasson; Edited by Edmund Blair