France's largest carmaker Peugeot Citroen is slashing 8000 jobs and closing two factories as it struggles to curb mounting losses.
Peugeot said the Aulnay plant near Paris, which employs 3,000 workers, would stop production in 2014, the BBC reports.
Last week, Peugeot said its first-half sales had fallen 13% amid a "profound crisis" in its eurozone markets.
Another plant at Rennes in western France is set to shed 1,400 posts from the 5,600 it employs there.
A further 3,600 jobs would be lost across all facilities in France.
The company said its first half sales fell 13% amid what it calls a profound crisis in the 17-nation euro zone region.
Peugoet said it is heading towards a first half loss of more than $US850 million.
Over the past couple of years, companies that make high profit margins from selling luxury cars, such as Audi, BMW and Mercedes, have done well, the BBC says.
Relative newcomers Kia and Hyundai have also enjoyed success, with competitively priced models made in ultra-modern, hi-tech factories in the Czech Republic and Slovakia.
Analysts say traditional mass-market carmakers, such as Peugeot, as well as Renault, Opel/Vauxhall, Ford, Fiat and Toyota, are stuck with old-fashioned factories and well-paid workers demanding more.