Volkswagen's chief executive welcomed a deal to slash jobs and reduce production capacity in Germany without the need to close factories, but the car giant's shares fell heavily on Monday.

Volkswagen shares were down 3% in early trade on Monday with analysts citing uncertainty about the automaker's cost-cutting deal with unions and likely headwinds in 2025.

Volkswagen will undertake significant production changes and cut more than 35,000 jobs by 2030 to improve its financial situation.

Volkswagen on Friday announced sweeping changes to its German operations, including more than 35,000 future job cuts and sharp capacity reductions in a last-gasp deal between Europe's top carmaker and unions to avert mass strikes.

VW Group threatened to close up to three plants in Germany, but a deal with workers means those plants are safe.

Volkswagen’s employee representatives say they have reached a wage deal. The deal will ward off management proposals for plant closings in Germany and bars involuntary layoffs through 2030.