WOLFSBURG (dpa-AFX) - As part of its cost-cutting program, VW, Europe's largest carmaker, is extending its partial retirement scheme and is also offering targeted severance payments. The offer of partial retirement will now also be extended to those born in 1967, the company announced on Monday in an internal communication to the workforce, which was made available to the German Press Agency. For those born in 1965 and 1966, for whom corresponding programs already existed, the deadline for notification will be extended and younger employees will be offered targeted severance packages.

"We are taking a deliberate and targeted approach to the restructuring of Volkswagen AG," said HR Board Member Gunnar Kilian, according to the press release. "We have agreed this with the Works Council." The aim is to reduce personnel costs in administration by 20 percent by 2026.

The savings are part of the efficiency enhancement program launched last year. The Group had already agreed on key points with the works council in December. Redundancies for operational reasons were ruled out. VW has left open how many jobs will ultimately be cut. It was not about heads, but about costs, it was said.

Great interest in partial retirement

"We are currently seeing a great deal of interest in our attractively structured partial retirement scheme," said HR Director Gunnar Kilian, according to the press release. "With an average of 85 percent of remuneration in the active and passive phases, we offer our colleagues the transition to a financially secure retirement. At the same time, partial retirement offers the company the opportunity to reduce staff in a sustainable and socially responsible manner."

In addition, the Group Management Board has decided to offer targeted termination agreements in the administrative area in return for severance pay. There is an additional special bonus until the end of May for those who decide quickly. Unlike previous severance programs, however, the offer does not apply to all interested parties, but must be accepted by VW in each individual case. Furthermore, it only applies to employees in administration and not in production.

No blanket severance program

"We have deliberately decided against a blanket severance agreement offer," explained Kilian. "It is clear that a sustainable reduction in personnel costs can only be effective if we use our personnel tools in a targeted manner and in the spirit of double voluntarism."

The program is expected to improve earnings at the core Volkswagen brand by four billion euros in the coming year and ten billion euros per year by 2026. According to earlier information, only a fraction of this will be accounted for by personnel costs. Significantly greater savings are to be made in material and fixed costs./fjo/DP/mis