Automotive News Europe — 2025-02-13
Automotive Industry
Porsche plans to cut 1,900 jobs in Germany as part of cost-cutting measures to reverse sliding profitability amid weak electric vehicle demand and “challenging geopolitical and economic conditions.”
Workers at Porsche’s main plant in Stuttgart-Zuffenhausen and its r&d site in Weissach will be affected by the job losses.
“The goal is to reduce the number of jobs at Porsche with the main sites in Zuffenhausen and Weissach by 15% by 2029,” a Porsche spokesperson said.
There will be no forced lay offs. The brand plans to reduce headcount through voluntary measures such a early retirement and severance packages, and will take a “restrictive approach” to new hires, the spokesperson said.
“Porsche is still in a comparatively good position. But there are many challenges to overcome — such as the delayed ramp-up of electromobility or the challenging geopolitical and economic conditions,” the spokesperson added.
Porsche, which is majority owned by Volkswagen Group, employs around 42,000 people globally and 23,650 in Stuttgart and the surrounding region.
The automaker’s profits have been hit by slumping sales in China and low demand for EVs in Europe.
Porsche warned on 6 February that expenses tied to expanding its product portfolio with more combustion engine and plug-in hybrid models will hurt its profitability this year. It expects its profit margin for 2024 to be at the lower end of its forecast range at around 14%, down from an initial projection of 15% to 17%.
The company is ousting its chief financial officer, Lutz Meschke, and sales chief, Detlev von Platen, after they were heavily criticized for the company’s poor performance and weak share price.
Porsche had already initiated job cuts in 2024 by not renewing the contracts of 1,500 fixed-term employees, while another 500 are now coming to an end. This was determined to be insufficient, the spokesperson said.
Languishing EV demand has reportedly prompted other VW Group brands to consider additional upgrades to their combustion engine lineups.
VW brand could update best-selling models including the Golf hatchback and T-Roc and Tiguan SUVs in the 2030s, and Audi is having similar discussions regarding the A3 compact model, the German business paper Handelsblatt reported.
“Volkswagen has not changed its plans to phase out the combustion engine in Europe by the early 2030s and will react flexibly to possible market changes,” VW brand said in an emailed statement.