German carmaker Porsche to cut 5,000 jobs by 2035

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German luxury sports carmaker Porsche, a subsidiary of the Volkswagen Group, said Monday it would cut 5,000 jobs by 2035 as part of a strategic realignment to boost competitiveness.

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The maker of the 911 sports car has seen profits collapse due to plunging sales in China, where home-made electric vehicles now dominate, as well as US tariffs and a costly decision to hit the brakes on its troubled electric transition.

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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,” the company said.

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With job cuts already announced last year, the firm therefore plans to reduce its workforce of over 30,000 by 8,900 people.

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Announcing what it called its “future package”, the carmaker also said it would invest a cumulative of 2.1 billion euros ($2.4 billion) by 2035 in two plants, at Zuffenhausen and Weissach near Stuttgart.

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Workers there would enjoy employment and site protection until 2035, it said after negotiations with the general works council and trade unions.

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“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.

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Other cost-cutting measures were also announced, such as deferring wage increases until 2035 and having senior executives forgo base salary increases in 2027 and 2028.

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Porsche is among automakers which have recently taken a hefty hit after ploughing huge sums into the electric transition, only to find demand weaker than expected.

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The manufacturer announced last year it was slowing its shift to EVs, a move that dented 10-brand Volkswagen’s profits by billions of euros.

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Measures included delaying the introduction of some fully electric cars, and extending the life of some combustion engine and hybrid models.

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AFP

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