Volkswagen to cut up to 30,000 jobs globally to reduce expenses

German car-maker Volkswagen has reached an agreement with employees that will see 23,000 jobs cut initially, a figure which could rise to 30,000, representing 5% of its global workforce.

The company is still making efforts to recover from one of the biggest scandals in its history last year, when it admitted to having fitted millions of vehicles with emissions-cheating devices. The total legal costs arising from the incident is expected to surpass $30bn.

Volkswagen said it was committed to no compulsory redundancies under the deal agreed with union, with the initial 23,000 of the positions to leave its domestic market in Germany.

In a press conference at its headquarters in Wolfsburg, brand chief Herbert Diess said the losses were "socially acceptable".

"I am very sorry for those affected, but the situation of the brand at the moment gives us little room for manoeuvre," he said.

"We're shaking up the entire VW brand and making it fit for the future," he added.

By 2020, the company aims to increase its earnings by €3.7bn per year in an effort to reclaim some of the profits lost by the scandal.

The job cuts will arrive via early retirement schemes and not replacing workers that leave. The cost cuts are made up of €3bn at its German factories and another €700m internationally.