Volkswagen Group subsidiary Porsche revealed on Monday that it plans to eliminate 5,000 positions by 2035 as part of a strategic reorganization designed to boost competitiveness.
Profits for the producer of the 911 sports car have plummeted due to declining sales in China, where home-made electric vehicles now dominate, as well as US tariffs and a costly decision to halt its failed electric transition.
Volkswagen Group said, The new plan includes the “socially responsible reduction of a further 5,000 jobs by 2035, largely through natural attrition, demographic effects, the expansion of the special partial retirement programme and voluntary severance agreements.”
Combined with the staff reductions announced last year, the company plans to shrink its workforce of over 30,000 by 8,900 positions.
The automaker unveiled its “future package,” confirming an investment of 2.1 billion euros ($2.4 billion) across two facilities in Zuffenhausen and Weissach in Stuttgart through 2035.
Following discussions with the general works council and labor unions, the company agreed to extend employment and job protection guarantees for workers through 2035.
“The shared objective is to strengthen the competitiveness of the sports car manufacturer and secure as many jobs as possible in the long term,” the company said in a statement.
Additional cost-reduction measures were announced, including pushing back pay raises until 2035 and requiring senior executives to waive base salary increases in 2027 and 2028.
Porsche joins a number of car manufacturers facing heavy losses after making substantial investments in electric vehicles, only to encounter lower-than-expected demand.
Last year, the automaker confirmed it was delaying its shift to EVs, a move that cost the Volkswagen Group billions of euros in lost revenue across its ten brands.
Backstory…
Porsche has launched a major restructuring plan as it responds to mounting pressure across Europe’s automotive industry. The German luxury carmaker is grappling with slowing electric vehicle demand, rising production costs and intensifying competition from Chinese automakers.
It has also struggled with weaker-than-expected sales in key markets, particularly China, where domestic electric vehicle brands have rapidly gained market share. Like several other European manufacturers, Porsche is reassessing its transition strategy after consumer demand for fully electric vehicles grew more slowly than expected.
