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Porsche is set to cut 1,900 jobs by 2029 as it grapples with stagnant demand for its electric models.
The reductions, which will target Porsche’s factory in Zuffenhausen, which manufactures its all-electric vehicle Taycan, and a research and development centre on the outskirts of Stuttgart, comes after the company last week announced a plan to expand its range of combustion engine cars and hybrids.
The luxury-car maker, part of the VW group, has warned its profit margins were expected to be between 10 per cent and 12 per cent this year, well below the group’s long-term target of 20 per cent. Ploughing €800mn into combustion engine vehicles and hybrids will further add to its costs this year.
Porsche, which manufactures all its cars in Germany, blamed the decision to cut jobs on “the delayed ramp-up of electromobility [and] the challenging geopolitical and economic conditions”.
Porsche’s embrace of electric models has misfired in China, where sales last year slumped 28 per cent as consumers failed to embrace the Taycan, its Zuffenhausen-manufactured EV.
Last autumn, the company cut one shift in Zuffenhausen to deal with the sharp drop in demand for the Taycan, which plummeted 49 per cent last year.
The announcement follows the VW group’s agreement in December aimed at cutting 35,000 jobs at its flagship brand. The carmaker said it would do so “in a socially acceptable manner” by 2030, as falling sales in both China and its home region prompted Europe’s largest carmaker to make steps to halve its production capacity.
Audi, another VW brand, has also come under pressure to address sliding deliveries, with reports that chief executive Gernot Döllner has been trying to negotiate thousands of potential job cuts with union IG Metall.
Jörg Schlagbauer, chair of Audi’s works council, in January told Handelsblatt that the proposals were “brutal cost-cutting measures”. Neither the union nor Audi has confirmed the number of potential job cuts.
As part of the agreement struck in December between IG Metall and VW, no lay-offs are possible at the luxury-car maker until 2030. The Stuttgart-based sports-car maker will therefore rely on employees accepting voluntary redundancy packages or pre-retirement.
In a joint interview with local newspaper Stuttgarter Nachrichten, Porsche’s head of human resources, Andreas Haffner, and its works council head, Harald Buck, said pre-retirement offers were available to employees as young as 55.
Haffner added that by the end of this year roughly 2,000 temporary Porsche workers would have left the company after their contracts were not renewed.
In response to weak EV demand, Porsche has begun talks to end the contracts of chief financial officer Lutz Meschke and Detlev von Platen, the group’s head of sales and marketing, ahead of their end dates.
