Saab Automobile is to axe 701 jobs following talks with its unions. The figure is fewer than the original number of proposed losses that were announced a month ago.

Saab said in March that it would lay off 750 of its 4,100 Swedish employees as part of its strategy to survive as an independent carmaker.

A Saab spokeswoman Gunilla Gustavs confirmed to the news agency Reuters today that the 646 blue-collar workers and 55 white-collar employees would work their last day at Saab at the end of this week.

Earlier this month, a Swedish court extended the period the General Motors unit is protected from creditors, giving it further time to restructure.

The carmaker, which sought protection from creditors in February, had outlined plans for its continued reorganisation, including a reduction of non-prioritised debt by 75%, at its first formal meeting with creditors earlier on Monday, according to Reuters.

Saab now has to seek another extension of the reconstruction period by 19 May, according to documents presented to the court by the company's administrator.

GM has said it will shed loss-making Saab at the latest by 2010.