German luxury carmaker Porsche plans to eliminate around 1,900 jobs at its Stuttgart-Zuffenhausen core plant and the Weissach Research plant, located to the west of Stuttgart by 2029, the company said on Thursday.
Struggling with high domestic manufacturing costs, weak demand, fierce competition, and a slow shift to electric vehicles, Porsche is facing a deepening crisis. Following sales decline in China and the ongoing challenging transition to EVs made another setback for the brand.
“We have many challenges to overcome,” Porsche HR chief Andreas Haffner stated in an interview with the daily Stuttgarter Zeitung. Porsche announced that the job cuts will take place over the coming years at the company’s Stuttgart headquarters and its nearby research center Weissach in Germany.
The anticipated job cuts will be voluntary and may involve early retirement and layoff packages. A job security agreement still remains in place for German employees until 2030. After disclosing that profit margins are anticipated to range between 10% and 12% this year lower than the long-term target of 20% Porsche revealed plans to launch new internal combustion engine (ICE) and plug-in hybrid (PHEV) vehicles. The company also warned that these developments and other battery-related projects will incur an additional cost of 800 million euros in 2025.
Porsche’s latest workforce reduction follows its 2024 decision to end temporary production worker contracts. Porsche’s Stuttgart based plant is currently grappling with declining performance in Chinese market and have experienced significant share declines. The brand encountered a 3% decline in global deliveries last year, primarily attributed to a substantial 28% drop in the Chinese market.
In an email exchange with Bloomberg, the company confirmed that “Volkswagen has not changed its plans to phase out the combustion engine in Europe by the early 2030s,” adding it will ‘‘react flexibly to possible market changes.’’
Highlighting the rapidly evolving market, Porsche declared its intention to increase the production of combustion engine and plug-in hybrid models to augment profitability. Earlier this month, the company faced internal conflicts, leading to the unexpected departure of two senior executives.
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