German automaker Volkswagen say it will eliminate up to 7,000 jobs by 2023 as it seeks to accelerate its transition to electric vehicles, although the cuts should be achieved via retirement offers.
Last year VW brand's margin slipped to 3.8 percent from 4.2 percent in 2017, VW said on Tuesday. Last year, the brand's operating margin fell to 3.8 percent, lagging peers such as Peugeot which delivered a margin of 8.4 percent.
Finance chief Arno Antlitz said the measures will enable the brand to achieve a margin of 6 percent in 2022.
VW signed a labor pact in 2016 to cut 30,000 jobs worldwide and generate 3 billion euros in annual savings.
Ralf Brandstätter, Volkswagen's chief operating officer, said that the company needed to "do more to meet the challenges" the company is facing in the upcoming years, adding that the changes would make Volkswagen "fit for the electric and digital era".
The 5.9 billion euro target for 2023 comes on top of the 2020 target, the company said.
It said that, at the same time, it will create some 2,000 new jobs in technical development.
The company plans to become the world's biggest producer of electric cars by 2025, with the VW brand alone aiming to build more than 20 models on the group's electric vehicles platform.
VW will start producing the first model of its all-electric I.D. vehicle range toward the end of this year.
VW will start building the ID at a factory in Zwickau, Germany, which has maximum annual production capacity of 330,000 models.
Volkswagen said it will launch nearly 70 new electric models by 2028, accelerating its rollout of zero-emission cars.