Here's Why Volkswagen Is Planning On Cutting 5,000 Employees

German automaker Volkswagen announced Sunday that it is planning to cut thousands of jobs. The company plans to offer older employees early or partial retirement, Handelsblatt reported, per Reuters.

Volkswagen will be splitting 500 million euros, or $598 million, among the 5,000 employees. Handelsblatt reported that this move would save the company billions of dollars in the long run, so it can focus on the financing of electric vehicles.

Electric vehicles are less complex to build and require fewer workers, Reuters noted. In November, Volkswagen said planned to build 1.5 million electric cars by 2025.

Along with these early retirement plans, Volkswagen will also continue its hiring freeze until the end of 2021, unless future employees plan to apply for positions in IT and software areas. The Wolfsburg-based company will create 2,000 new software jobs.

Volkswagen will have a live stream event Monday on its Twitter feed, according to CEO Herbert Diess. The event may touch on the company's new battery technology.

Volkswagen is looking to become "the world’s most desirable brand for sustainable mobility," after announcing that more than 70% of its European sales by 2030 would be electric vehicles.