By Natascha Divac

FRANKFURT--General Motors Co.'s German unit Adam Opel GmbH said on Friday it would reduce working hours for some of its employees because of weakening demand for its Corsa and Insignia models in the aftermath of the Brexit vote.

"There will be short-time work in the plants in Ruesselsheim and Eisenach during the course of the year," an Opel spokesman said. He couldn't say how many days employees would work reduced hours.

"This will depend heavily on the sales volume of the Insignia and the Corsa in the U.K.," he said. The U.K is the company's biggest market for both vehicles.

Opel has been one of GM's biggest headaches as the German subsidiary has suffered declining sales and losses for years. However, the situation has improved recently and last month Opel reported its first quarterly profit since 2011.

GM said last month it expected a $400 million potential hit in the second half as a result of Brexit, citing the weakening of the British pound and slack U.K. demand. The problems could thwart the company in reaching its goal of returning to the black in Europe on an annual basis for the first time since 1998.

"The Brexit situation is an issue for everybody who does business in and with the U.K. at the moment," Opel said on Friday.

Short-time work is a German scheme used across sectors to prevent job losses, in which work hours are cut for a limited period of time. Any corresponding shortfall in pay is partly compensated by the government.

Germany's Volkswagen AG is also currently using short-time work due to a supplier dispute that has disrupted some production.

Write to Natascha Divac at natascha.divac@wsj.com

(END) Dow Jones Newswires

August 19, 2016 09:19 ET (13:19 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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