Hyundai is cutting 6.5% of its workforce in Asia Pacific and plans to slash its workforce by 15,000, as it attempts to boost its sales momentum in China and other emerging markets.
The announcement came as a key U.S. auto maker reported record sales for the fourth quarter and a strong finish to the year.
Hyundai, whose U.K. business is the world’s second largest after General Motors, said in a statement it would reduce its workforce from about 11,000 to about 6,600.
The automaker said the restructuring would result in a reduction in costs by $500 million to $600 million.
“We continue to work closely with Hyundai and other leading automotive suppliers to deliver on our vision of driving sustainable growth in the automotive industry in the Asia Pacific region,” Hyundai chief executive officer Herbert Yu said in the statement.
“Hyundai has delivered an extraordinary global growth story, but its long-term future depends on strong growth in China.”
Hyundai’s global headcount fell from 6.3 million in 2015 to 5.3, the most recent figures available.
Hyundai said it would also reduce the number of suppliers in the region from 1,100 to 600.
The automaker, which was founded in Japan in 1964, has been in the spotlight for its high-profile car recalls that have forced the U.A.E. and other parts of the world to suspend sales.
The company was hit by a recall last year of about 2.5 million vehicles, which led to about 2,700 deaths and nearly $1 trillion in costs.
The company said it planned to reduce costs by 10% to 20% to help offset the costs associated with the recalls.
Hyundai expects to release a fourth quarter earnings statement on Thursday.