AUTONEWS

Porsche joins program to eliminate 1,900 jobs

Porsche intends to cut 1,900 jobs in Germany in the coming years, due to difficulties in the automotive sector. The brand has assured that there will be no mandatory redundancies.

Luxury car manufacturer Porsche announced on Thursday that it wants to cut 1,900 jobs in Germany, in view of the difficulties in the automotive sector that do not spare the Volkswagen group brand.

Due to falling sales and a difficult transition to electric vehicles, "a program to eliminate 1,900 jobs" has been decided in the coming years, according to a statement released by the brand.

The job cuts, which represent around 4.5% of Porsche's total (42,000 employees worldwide), involve two German plants located near Stuttgart, in the southwest of the country.

The job cuts will be implemented without mandatory redundancies and before 2030, according to a company agreement that protects workers until that date.

The brand intends to find ways out of the reform, a partial retirement plan and a hiring freeze to reduce the number of employees, the statement said. In a European automotive sector in crisis, Porsche has not been spared, after its parent company, Volkswagen, recently announced that it wanted to cut 35,000 jobs in Germany at its main brand (VW) and stop production at two of its factories. 

The automotive sector is facing a drop in demand, rising costs, particularly in energy, and competition from Chinese brands. In 2024, the Stuttgart-based group recorded a 3% drop in its global deliveries, with a particularly sharp decline in China (-28%), its largest market. This decline is more significant than that of Volkswagen, whose sales fell by 1.4%. The German sports car manufacturer is expected to reduce its workforce by 1,900 people, including layoffs and retirements. The announcement comes amid a crisis in the country's auto sector. 

German sports car manufacturer Porsche announced on Thursday (February 13) that it plans to cut around 1,900 jobs at two factories in Germany by 2029. The cuts are in addition to the termination of around 2,000 other temporary contracts, already planned since last year. In these cases, the employee's stay at the company will not be extended after the end of the period. The company said that its main plant in Stuttgart and a secondary unit in Weissach will be affected. 

The cuts are expected to be completed by 2029, the company's human resources manager, Andreas Haffner, and the chairman of the works council, Harald Buck, told the German newspaper Stuttgarter Nachrichten. Part of the staff reduction will be through a part-time retirement scheme for employees born before 1970, in addition to restrictions on hiring new employees and the expected entry of professionals into full retirement. The employees will have guaranteed employment until 2030, the automaker said. Until then, layoffs for operational reasons are not expected to take place, but the company will open voluntary redundancy plans – when employees agree to leave their jobs in exchange for certain benefits.

The crisis at Porsche is part of a generalized downturn in the European auto sector. In addition to Volkswagen, which is planning to close plants and lay off employees, Fiat and Renault are also producing more cars in Europe than they have been able to sell. Porsche said the move was a result of the country's difficult economic conditions.

"We are still in a comparatively good position," said Haffner. "But we have a number of challenges to overcome. For example, the delay in the growth of electromobility or the challenging geopolitical and economic conditions."

As DW showed, competition from foreign automakers that produce electric vehicles and the unpreparedness of European automakers to enter this market have driven the sector's downturn. High energy prices in Europe, inflated by the war in Ukraine, are also exacerbating the crisis in the industry.

According to a Bloomberg Intelligence survey, one in three factories at companies such as BMW, Mercedes, Stellantis, Renault and Volkswagen are not operating at full capacity. At some plants, not even half of the vehicles that could roll off the production lines are being manufactured.

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