A statement from the company said the plan will be carried out through voluntary departures, adding that all production sites and all types of jobs in the company, mainly in France, will be covered under the plan.

    The company said the urgent action was necessary in order to protect the future of the other 200,000 employees.

    The plan was initially for 2,700 job cuts, but the company later added 850 jobs losses at the Rennes site, because of a decline in demand for medium-range sedans and high range vehicles.

    Around 900 redeployments will be carried out at other sites of the company in France.

    Since July, Peugeot Citroen has been facing a significant drop in car sales, which declined 5.2 percent in the third quarter.

    "This recession will continue in 2009," the company said in the statement, predicting a 17 percent drop in sales in the fourth quarter this year and at least 10 percent in 2009.