Toyota Motor Corp. has dismissed roughly 1,000 contracted factory workers in China as the world’s top-selling automaker adjusts production in a market that’s rapidly transitioning to electric vehicles.

Staff at a joint venture between the Japanese carmaker and Guangzhou Automobile Group Co. were let go before the expiration of their contracts “in light of the current production situation,” a Toyota spokesperson said.

The slower transition to electric vehicles by Toyota, Honda Motor Co. and Nissan Motor Co. is translating into declining sales in China as car buyers embrace products by competitors such as Tesla Inc. and BYD Co. Toyota’s China deliveries declined for the first time in a decade in 2022, and the two dozen hybrids and EVs the brand has on sale haven’t been a hit with customers there.

Read more: China’s EV Revolution Shows Grim Future for Japan Car Titans

The venture, called Guangzhou Toyota Motor Co., “will also provide the economic compensation required by law,” the spokesperson said.

Koji Sato, Toyota’s president, pledged in April at the Shanghai auto show that the brand would accelerate the development of electric cars tailored to the Chinese market.

Toyota’s cuts follow fellow Japanese automaker Mitsubishi Motors Corp.’s decision earlier this month to suspend its China operations after years of sluggish sales.

GAC is the local joint venture partner for both Toyota and Mitsubishi Motors.