The Brazilian unit of Volkswagen has said that it will be offering a voluntary layoff program for nearly 4,000 workers as an alternative to an earlier retraining proposal.

The announcement came amid continuing market gloom in Brazil and follows VW‘s announcement earlier this year it wanted to cut its Brazilian work force by about 4,000, or roughly 16 percent of the total.

Unions and the company have been locked in negotiations for three weeks. The unions want all jobs guaranteed until 2006.

Reuters reported that the voluntary layoff program comes after the company unveiled a plan to transfer the nearly 4,000 workers to a new company which would carry out retraining for the workers and help them find other jobs.