Volkswagen is cutting manager salaries by 10% and reducing jobs by over 35,000 to address production capacity and avoid strikes.

Volkswagen on Friday said it had agreed with unions to cut more than 35,000 jobs at its German sites by 2030 in a socially responsible manner, which would help achieve more than 15 billion euros ($15.

After extensive negotiations, the German labor union IG Metall and the management of Volkswagen have reached an agreement. VW has decided not to close German factories, but it will significantly reduce its workforce.

But like many traditional automakers, Volkswagen faces increasing pressure to adapt to a rapidly changing industry. Electric vehicles, cheaper competitors, and shifting consumer preferences have created significant challenges.