Volkswagen brand has stopped hiring new staff until year-end, Ralf Brandstaetter, the unit’s chief, said on Wednesday.

Despite a slight recovery in demand, car sales remain below levels seen before the coronavirus crisis, Brandstaetter said in an interview published in an internal VW newsletter, which was seen by Reuters.

“We remain under substantial cost pressure. Deliveries and therefore revenue have dropped sharply. At the same time, a large amount of costs remain. This is why we have decided not to add new people,” Brandstaetter said.

VW’s job guarantee for German employees until 2029 remains in place, the CEO said.

The company’s works council chief Bernd Osterloh said that without external hiring, VW needs to do more to retrain existing staff.

In an interview with the Wolfsburger Allgemeine Zeitung, Osterloh said he expected production at the plant in Wolfsburg this year to drop to around 500,000 cars, instead of 700,000 which had been planned.

Osterloh also told the paper he would stand for re-election as head of the company’s powerful works council if labour representatives and workers supported the move.

VW’s Wolfsburg plant is currently unable to produce 3,000 cars a day because it has cut down to a two-shift system, Osterloh told another local paper, the Wolfsburger Nachrichten.

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