PARIS -- Russian automaker AvtoVAZ plans to reduce staff numbers to 30,000 by 2020 from 55,000 to regain its competitiveness, finance head Evgeny Belinin was quoted as saying in the French daily business newspaper Les Echos.
"We reckon we will have a workforce of 30,000 employees in 2020," Belinin was quoted as saying by newspaper from the Moscow auto show. "We have to become competitive again."
AvtoVAZ, controlled by the Renault-Nissan alliance, this week said that it plans other measures to combat a shrinking Russian car market that include cutting production of its Lada cars by 25,000 in the next three months and freezing the prices of its vehicles this year.
Russian car sales fell 23 percent to 180,767 year-on-year in July, while seven-month sales were down 10 percent to 1.4 million, according to the Association of European Businesses (AEB) lobby group.
Registrations have been hit as consumers avoid big ticket purchases as the West tightens sanctions against Russia's banks and oil sector over the growing crisis in Ukraine.
The Russian government announced plans on Thursday to resume state-backed subsidies aimed at encouraging consumers to trade in old cars for new models.
AvtoVAZ will cut as many as 1,500 management and salaried positions next year, when it targets an operating-profit margin of 3.5 percent of revenue, Belinin told Bloomberg in an interview on Thursday. The cuts are in addition to plans this year to reduce white-collar staff to 10,000 people from 16,000 as part of wider plans to eliminate 12,800 jobs, or 19 percent of the workforce, by the end of this year.
"The problem isn't with working people, it's with managers and specialists," Belinin said at the company's headquarters in Togliatti. "There are situations when we have managers who only manage one person."
As part of the restructuring, AvtoVAZ will concentrate administrative functions in two buildings, compared with four now, Belinin said. The empty buildings will then be rented out.
Additionally, AvtoVAZ will sell 2 billion rubles worth of real estate and dealer-related assets over the next two to three years, Belinin said.
The carmaker plans to invest 2 billion euros ($2.6 billion) over the next three to four years in its operations, the CFO added.
Reuters, Bloomberg and Automotive News Europe contributed to this report