While it's not good news for those affected, VW's permanent worker's roles have been secured by the move with group CEO Martin Winterkorn saying the company is not considering mandatory job cuts at the moment - though it has not ruled out cutting working hours.
Mr Winterkorn said VW will not have any temporary workers by the end of 2009.
"That is not good for those who will be affected, but there is no other way to do it," he said.
Mr Winterkorn also predicted the financial crisis would right itself by 201, and said VW was therefore continuing with plans for the US production plant.
"I expect that the United States would have overcome its problems at the latest in 2011 when the plant is ready," he added.