Volkswagen (VLKAY)  confirmed Friday that it will eliminate 30,000 jobs as part of a €3.7 billion brand overhaul that will attempt to draw a line under its global emissions scandal and kick-start sales growth.

CEO Matthais Mueller outlined the moves at hastily-arranged press event at VW's headquarters in Wolfsburg as the company struggles to overcome its year-old emissions scandal that many fear has permanently damaged the reputation of one of corporate Germany's strongest brands and cost the company at least €18 billion in fines and replacement costs.

"We are going to cut about 30,000 jobs, out of which 23,000 jobs will be in Germany. However, our employees in Germany will need no worry ... there will be no compulsory redundancies, the reductions will be assured by attrition and phased early retirement," Matthais, who replaced Martin Winterkorn last year, said. "I am very sorry for the people who are affected by that, but the situation of our brand currently leaves us with very little room for manoeuvre at the moment." 

The jobs cull, which represents around 5% of VW's global workforce, forms part of an agreed restructuring plan with its labor union that will involve 23,000 domestic job cuts, and 30,000 worldwide, by 2021 in an effort to save around €3.7 billion ($3.9 billion) each year.  

Having secured the agreement with labor, VW will now be able continue its 'TOGETHER - Strategy 2025' to create 9,000 new jobs with the savings and new investments as the company transitions to electric car production. It plans to sell 3 million units a year by 2025 built in two German cities: Wolfsburg and Zwickau, in Saxony near the Czech Republic border.

VW shares added 1.5% at the start of trading in Frankfurt to change hand at €130.08 before paring gains to trade little-changed at €128.92 by noon in Frankfurt.

If you liked this article you might like

Goldman Sees 'High Probability' of Market Correction: LIVE MARKETS BLOG

Goldman Sees 'High Probability' of Market Correction: LIVE MARKETS BLOG

Worried About the Weak Dollar? Look at These Euro-Exposed Stocks

Worried About the Weak Dollar? Look at These Euro-Exposed Stocks

U.S. Stock Futures Turn Lower, Fall Off Record-Setting Pace

U.S. Stock Futures Turn Lower, Fall Off Record-Setting Pace

Forget Tesla, Volkswagen Is the Automaker Stock I Love

Forget Tesla, Volkswagen Is the Automaker Stock I Love

No Thanks Ford and GM, I'll Drive Myself in a Lamborghini Aventador

No Thanks Ford and GM, I'll Drive Myself in a Lamborghini Aventador