Porsche, a renowned carmaker and majority-owned by Volkswagen, has announced plans to lay off an additional 1,900 employees in Germany by 2029. This decision comes after a review of an ongoing program that was deemed insufficient in addressing the company’s needs.
The job cuts, amounting to a 15% reduction in positions, will primarily affect Porsche’s main sites in Stuttgart-Zuffenhausen and Weissach in southwestern Germany. However, due to a location safeguarding agreement in place until 2030, Porsche is unable to enforce compulsory redundancies.
The process of job reduction began in 2024 when Porsche chose not to renew the contracts of 1,500 fixed-term employees. An additional 500 contracts are also set to conclude, contributing to the overall reduction in workforce. The company plans to manage these reductions through natural attrition, demographic shifts, and a cautious hiring policy.
A company spokesperson stated, “That alone is not enough: the Executive Board and Works Council have therefore decided on a program to cut around another 1,900 jobs across the entire company in the coming years.”
Despite the challenges faced by Porsche, the spokesperson mentioned that the company is still in a comparatively good position. However, there are several obstacles to overcome, such as the delayed ramp-up of electromobility and challenging geopolitical and economic conditions.
Recently, Porsche Automobil Holding, the holding company of Porsche, forecasted a significant increase in impairments on its stake in the luxury carmaker, reaching between €2.5bn to €3.5bn. This is nearly double the earlier expected impairment range of €1bn to €2bn. Additionally, Porsche anticipates writedowns related to its top shareholding in Volkswagen, potentially reaching up to €20bn, indicating a substantial financial impact on the holding company.
The local Stuttgarter Zeitung newspaper was the first to report on Porsche’s plans for job cuts. The company’s decision reflects the ongoing challenges faced by the automotive industry and the need to adapt to changing market dynamics.
