The Volkswagen group is to cut 30,000 jobs at its core brand, aiming to save 3.7 billion euros a year from 2020.
As part of an agreement with its trade unions Europe’s largest carmaker has promised there will be no forced redundancies in Germany in the next eight years.
VW has to find billions of euros for fines and settlements from its diesel emissions cheating scandal and fund a shift towards making electric and self-driving cars.
VW has agreed to pay $15 billion (14.1 billion euros) under a settlement with US authorities and owners of some 500,000 vehicles which had the means to turn off emissions controls at certain times.
Around 11 million vehicles worldwide were fitted with software which was set up to cheat pollution tests, making it look like they were greener than they really were.
“Matthias Muller, Volkswagen’s CEO, told reporters: “This future pact is the largest reform programme in the history of the core brand of our group. It will make Volkswagen efficient, productive and competitive. At the same time, it will enable the brand to advance the technologies and trends that will shape the future of the automotive industry.”
A total of 23,000 jobs will go in VW’s home base of Germany, where costs are high. The VW brand has 114,000 employees in Germany.
The cuts will come from buyouts, early retirements and by reducing part-time staff.
The number of workers in North America, Brazil and Argentina will also be reduced.
Herbert Diess, head of the core Volkswagen brand, said: “We are expanding new capabilities in future-oriented areas and creating around 9,000 new jobs. For example, in software development. Our goal is to fill as many positions as possible internally. We will therefore intensively look after the further training of our employees.”
Volkswagen has said it will build electric cars at its factories in Zwickau and Wolfsburg.
Electric motors will be built in Kassel, and VW will start battery cell production and development in Salzgitter.
Volkswagen will also build battery packs for electric and hybrid cars at its plant in Braunschweig, the company said.