Volkswagen is set to make an unprecedented move: closing three German factories in a drastic cost-saving effort aimed at cutting over $4.3 billion. The announcement signals a significant shift for VW, a brand that has maintained a strong presence in Germany since its founding.

Volkswagen plans to close at least three factories in Germany, lay off tens of thousands of staff and downsize remaining plants in the country, the company’s employee group said Monday.

Volkswagen plans to close its first-ever German plant amid declining profits, risking tens of thousands of jobs and prompting union backlash.

Volkswagen says significant cost cuts are urgently needed as it reports a steep decline in third-quarter earnings and faces employee representatives angry at the possibility of the automaker’s first plant closures in Germany.

The auto maker’s top employee representative told workers that management planned to shutter three German factories to cut costs amid slumping sales.

The automaker is battling lagging electric-vehicle demand on top of intense competition in China and a domestic manufacturing footprint that costs too much to power and to staff.