Volkswagen and its powerful labor unions have agreed a turnaround plan involving 30,000 job cuts by 2021 at its core brand to boost profitability and fund a post-diesel gate shift to electric and self-drive cars, a source told Reuters on Friday.

The agreement foresees 3.7 billion euros (USD 3.9 billion) in savings at VWs namesake brand, a step which involves 23,000 job cuts in Germany alone, the source said. Labor leaders have agreed to the cuts in exchange for a pledge by management to create new jobs and make investments in electric cars.

VW brand will create 9,000 new jobs through investments in electric car technology, the source said. VW managers have agreed to build an electric car in Wolfsburg and a smaller electric vehicle in Zwickau. Electric motors will be built in Kassel and VW will start battery cell production in Salzgitter, the source said. Volkswagen declined to comment.