German car manufacturer Volkswagen plans to cut all its temporary staff, which numbered about 16,500 in 2008.
Martin Winterkorn chief executive told Der Spiegel magazine permanent employees were not at risk for the time-being.
Mr Winterkorn said the company has managed to avoid producing surplus vehicles by cutting working hours to 35 hours, which could be reduced further to 28 hours.
Volkswagen, Europe's leading car manufacturer, employs about 330,000 people worldwide.
Sales dropped 15% in January due to the global economic downturn and Volkswagen is predicting a 10% decline for 2009.
Volkswagen's finance unit said earlier this month it had received up to 2 billion euros in state guarantees for refinancing car loans.