FOSS Germany plant to lay off 5,000 employees to fight the electric vehicle market

German auto giant Volkswagen plans to cut as many as 5,000 jobs at its German plants and will reach its goal by letting senior employees retire early or partially, a move that could cost 500 million euros (about $601.4 million), sources said today.

AFP reported that Fuchs said in a statement that it had previously agreed to a plan at a meeting at the plant that would allow employees born in 1964 to retire in phases, while those born between 1956 and 1960 would be allowed to retire early.

FOSS said it expects as many as 900 people will choose to retire early, but it did not provide precise figures on how many people will choose to retire in phases.

Two sources told Reuters that the plan will be run at six German plants under VW, Fuchs’ main brand, cutting 3,000 to 4,000 jobs.

German business daily Handelsblatt reported that Fuchs will cut up to 5,000 jobs.

Fuchs declined to comment on the cost of the job cuts, which will depend on how many employees accept the terms. One source estimated that the cost of the job cuts would be close to 500 million euros.

The 83-year-old automaker is trying to follow in the footsteps of U.S. electric car major tesla and make itself more like a technology company. Fuchs announced it will raise its training budget from 40 million euros to 200 million euros. In addition, the company announced that it will extend its personnel freeze program until the end of 2021, while external hiring will be limited to the areas of electric vehicles, digitalization and battery development.