"This reduction in production will allow us to adapt our capacity to the level of demand," Volkswagen personnel chief Jochen Schumm said in a statement.
Approximately 61,000 of the affected workers are at VW facilities in Germany.
Another German car giant, luxury brand BMW, said earlier on Tuesday it planned to cut hours for some 26,000 workers beginning in February.
"The goal is to create the necessary cost reductions while simultaneously securing employment," a statement from the company said, adding that workers will still make around 93 percent of their normal salaries.
The reductions will affect workers in Dingolfing, where some 15,000 workers will go to part-time contracts, in addition to Regensburg, Landshut and Berlin, BMW's statement said.
"In particularly difficult times like these, we have been able to reach a good compromise by working with the company leaders and worker's representatives," Manfred Schoch, head of BMW's works council said in the statement.
BMW reported this month that December sales had dropped by more than a quarter from the previous year's figures.