WOLFSBURG, Germany (Reuters) – Volkswagen (VOWG_p.DE) on Wednesday said it will shrink its workforce by up to 7,000 staff, raise productivity and eke out 5.9 billion euros worth of annual savings at its core VW brand by 2023 in a bid to raise VW’s operating margin to 6 percent.

Volkswagen has ruled out compulsory layoffs until 2025, but early retirement will help the Wolfsburg, Germany-based carmaker to reduce its workforce between 5,000 and 7,000 positions, the carmaker said.

“The measures from the earnings improvement program will enable our brand to achieve a competitive return level of six percent in 2022,” Arno Antlitz, Volkswagen brand’s board member for controlling, said in a statement.

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