BERLIN, Nov 27 Reuters Volkswagen39;s 10 billion euro 10.9 billion savings programme will include staff reductions, managers told staff on Monday as brand chief Thomas Schaefer warned that high costs and low productivity were making its cars uncompetitive.

The German carmaker is in the midst of negotiations with its works council over a costcutting scheme at its VW brand, the first step in a groupwide drive to boost efficiency in the transition to electric cars.

With many of our preexisting structures, processes and high costs, we are no longer competitive as the Volkswagen brand, Schaefer told a staff meeting at the carmaker39;s headquarters in Wolfsburg, according to a post on the company39;s intranet site and seen by Reuters.

The company had previously said it planned to take advantage of the demographic curve to reduce its workforce, having pledged that it would not carry out dismissals until 2029.

In Monday39;s meeting, human resources board member Gunnar Kilian said this would be achieved through agreements on partial or early retirement.

However, the bulk of the 10 billion euro savings goal would be achieved through measures other than personnel reduction, Kilian added, with the full details to be defined by the end of the year.

We need to finally be brave and honest enough to throw things overboard that are being duplicated within the company or are simply ballast we don39;t need for good results, Kilian said.

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Reporting by Victoria…