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BERLIN (Reuters) – Car maker Volkswagen plans to cut up to 5,000 jobs in Germany by offering early or partial retirement to older workers, which could cost 500 million euros ($ 598 million), reported Sunday Handelsblatt newspaper.
The newspaper quoted a spokeswoman as confirming that the company had agreed to the plan with the works council to open partial retirement to people born in 1964, while also offering early retirement to older workers.
Volkswagen was not immediately available for comment.
Handelsblatt cited company sources as saying that Volkswagen is setting aside 500 million euros for the plan because it would compensate departing employees by supplementing their pensions, even if it would save billions in the long run.
The newspaper said Volkswagen was also extending the hiring freeze until the end of the year. It was previously only in place until the end of the first trimester. External recruitments can only be made in areas such as information technology and software.
The Volkswagen Group said in January it would reduce overhead costs by 5% and procurement costs by 7% over the next two years.
Reporting by Emma Thomasson; Editing by Edmund Blair
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