VW brand to slash workforce by 7,000

The job cuts are intended to boost the brand's bottom line.

Volkswagen announced this week a plan to eliminate up to 7,000 jobs at its namesake brand. VW says the move will help ensure profitability as the company transitions to the electric and autonomous vehicle era.

At least for now, any jobs cuts will be voluntary. VW is confident it can get close to its targeted 7,000 job cuts by offering early retirement and simply not restaffing vacant positions. If that goal isn't reached, VW will begin compulsory layoffs in 2025.

The cuts are intended to lift the brand's profit margins to 6 percent, up from 3.8 percent last year. VW estimates the cuts, along with other measures, will net an annual savings of $6.7 billion by 2023.

"We will significantly step up the pace of our transformation so as to make Volkswagen fit for the electric and digital era,” VW brand COO Ralf Brandstaetter told Bloomberg.

VW's electric car portfolio is limited at the moment, but the company hopes to sell at least 1 million battery-powered vehicles by 2025. "Our goal is to become the world's number one in e-mobility by 2025,” Brandstaetter said.

The VW brand currently employs about 185,000 people around the globe.