© Reuters. FILE PHOTO: A Volkswagen logo is seen at a construction completion event of SAIC Volkswagen MEB electric vehicle plant in Shanghai

BERLIN (Reuters) – Carmaker Volkswagen (DE:) plans to cut up to 5,000 jobs in Germany by offering early or partial retirement to older employees in a move that could cost 500 million euros ($598 million), the Handelsblatt newspaper reported on Sunday.

The newspaper quoted a spokeswoman confirming that the company had agreed the plan with the works council to open partial retirement to those born in 1964, while also offering early retirement to older employees.

Volkswagen was not immediately available to comment.

Handelsblatt cited company sources as saying Volkswagen was putting aside 500 million euros for the plan as it would compensate the employees who leave by topping up their pension, although it would save billions in the longer term.

The newspaper said Volkswagen is also extending a hiring freeze until the end of the year. It had previously only been in place until the end of the first quarter. External hires can only be made in areas like information technology and software.

The Volkswagen Group said in January it would cut overhead costs by 5% and procurement costs by 7% over the next two years.

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