Ford Motor Co. is cutting a shift at the Romanian factory that builds the B-Max model just weeks after launching the small minivan.
The automaker will also offer buyouts to some hourly workers at the plant in Craiova under what is calls a "limited voluntary separation program."
The plant, 260km west of Bucharest, has about 3,600 employees with most workers having more than four years of service.
The company is still in discussions with unions, a Ford spokesman said on Friday.
The Craiova plant will operate on a single shift as Ford struggles to overcome sluggish sales in Europe.
Ford launched sales of the B-Max last month. The model is based on the same platform as the Fiesta subcompact and replaces the Europe-only Fusion minivan.
Auto sales in Europe have tumbled this year as economic weakness saps consumer confidence. Ford expects to lose at least $3 billion in Europe over the next two years.
In the first 10 months, Ford sales in the EU and EFTA countries fell 12.4 percent to 786,989, in a total market down 7.3 percent to 10.3 million, according to data from the industry organization ACEA. The automaker's market share in the region dropped from 8 percent to 7.6 percent.
Engine production increase
Ford said about 500 employees working at the assembly plant will be transferred to the Craiova engine plant.
Engine production will rise to two shifts, up from a single shift now, to support demand for Ford's 1.0-liter turbocharged engine and the upcoming launch of a new 1.5-liter engine, Ford said.
Ford bought the Craiova factory, a former Daewoo manufacturing plant in 2008, paying 57 million euros to purchase the Romanian government's 72.4 percent stake in the factory.
In 2009, the automaker began production of the Transit Connect commercial van at the facility.
Ford originally planned to build about 60,000 vehicles at the factory this year and increase output to 105,000 vehicles in 2013.
Reuters contributed to this report