German auto giant Volkswagen (VW) will cut 35,000 jobs over the next five years as part of a comprehensive restructuring plan to save up to €4 billion, reports Autocar.

The manufacturer said the plan is designed to streamline operations, enhance efficiency, and secure a competitive financial footing as it pivots to electric vehicles.

The majority of the reduction will be implemented through voluntary measures, including early retirement and severance packages, in an effort to minimize social disruption, says the German car maker.

VW has approximately 120,000 employees in Germany, about half of whom work at the main plant in Wolfsburg.

The restructuring will also priorities optimizing production efficiency and reallocating resources towards Volkswagen’s electric vehicle strategy in a move aimed at reducing the overall capacity in its German manufacturing network by 700,000 vehicles annually.