MOSCOW/SAMARA, September 14 (RIA Novosti) - Russia's largest carmaker, AvtoVAZ, announced on Monday that it will re-introduce a full working week from December 14, with a workforce reduced by 5,000.

The company said in a statement that employees above retirement age would lose their positions, but receive compensation.

"Cuts are planned among managers of all levels, staff, specialists and other employees. The staff reductions will apply mainly to those above retirement age, who will be provided with full compensation... The total number of employees expected to be dismissed is 5,000," the statement said.

The car producer, known for its Lada brand, was earlier reported to have plans in place to gradually reduce its workforce by 36,000. The company, based in Togliatti in the Volga region, dominates the city's economy, and is by far the largest local employer.

According to the AvtoVAZ trade union, there are around 102,000 people currently working in the company, including 12,000-14,000 above retirement age.

AvtoVAZ President Igor Komarov has signed an order to cancel the four-day working week, which had been in effect since September 1.

Pyotr Zolotaryov, the head of the independent AvtoVAZ trade union Edinstvo (Unity), said the company's trade unions have not yet been informed of the order by the AvtoVAZ management to reduce the workforce. He said the union will discuss the situation on Tuesday and probably launch a protest.

AvtoVAZ has production capacity of over 800,000 vehicles annually. It has made more than 25 million Lada cars and auto components since it was established in 1970, as a joint project with Italian carmaker Fiat. The company currently produces 15 Lada models priced between 150,000 rubles ($4,800) and 350,000 rubles ($11,240).

However, the company recently recorded a loss of 14.2 billion rubles ($447 million) in January-June 2009 against a net profit of 1.49 billion rubles ($47 million) in the same period of 2008.