Avtovaz, which is 25% owned by Renault, will cut up to 27,600 jobs, about on-third of its workforce, to help it reach "effective and profitable production."

The company employs 102,000 and made the announcement as separate data revealed that car output in Russia fell 62.6% year on year to 369,000 units between January and August.

Output of foreign-branded cars fell 54.2% to 181,200 vehicles in January-August, the trade ministry said, while production of Russian-branded cars fell 68.3% 187,000 units.

Avtovaz said the 27,600 job cuts included 5,000 white collar jobs announced last week. Some 13,000 employees would retire with pensions while another 5,500 would be forced to take early retirement. Some 9,100 employees would be sacked but 6,000 would have the option to work again at Avtovaz in 2012.