Steve McClaren will remain in charge of Wolfsburg after a crisis meeting earlier today, according to reports in Germany.
The Englishman has come under pressure due to his side's poor form in the first half of the Bundesliga season and last night's elimination from the DFB-Pokal at the hands of second division side Energie Cottbus.
However, he has been given the chance to put things right in the new year after a meeting with the club's managing director Dieter Hoeness and his assistant coach Pierre Littbarski, according to the local Wolfsburger Nachrichten newspaper.
Instead, sanctions will be brought against the squad and the club is preparing to make an official statement detailing these later today.
McClaren's job was thought to be hanging by a thread after the embarrassing home defeat to Energie and their 13th-placed standing in the Bundesliga.
The former England boss and his team were jeered off the field at the end of another disappointing match at the VW-Arena and McClaren admitted afterwards things had to change.
"It was simply not good enough and the first half of the season was not good enough," McClaren told ZDF.
"I am disappointed, frustrated. We have problems in the dressing room, problems on the field.
"We have hit rock bottom. This club needs changes. They may be drastic, but I cannot control them.
"I don't know how these changes are going to look precisely. Nobody knows what will happen in the coming days.
"We have got to take a decision quickly. Now is the time, during the winter break, to clean things up."
Hoeness hinted last night that McClaren could be on his way out.
"We are going to have to discuss everything," he said.
"I can assure you that I cannot sleep well. I don't think I will be going on holiday - our plans for Christmas have changed."
When asked if McClaren's job was safe, Hoeness said: "I cannot say that yet."
