Porsche Is Getting Ready For Tougher Cuts

Porsche plans to intensify its cost-cutting program and is seeking far-reaching concessions from its workforce, local media reported.

The German automaker has been hit hard by US tariffs and the collapse of the luxury market in China, while at the same time implementing a costly turnaround in the electric vehicle market due to a lack of demand.

The new cuts are focused on Porsche’s main plant in Zuffenhausen, north of Stuttgart, and a nearby development center in Weissach, according to reports in the Stuttgarter Nachrichten and Stuttgarter Zeitung newspapers.

Measures under consideration include the outsourcing of entire operating units and vehicle projects.

The plans reportedly include ending lump sum payments and bonuses for employment anniversaries. Pension provisions will also be reduced. The plans include references to “redundancies” and “outsourcing” of services, as well as a reduction in the number of scientists and guaranteed job offers for trainees.

Other measures include “adjustments” to work-from-home arrangements and working hours, as well as “increased flexibility,” the newspaper reported, based on documents it has seen.

A Porsche spokesman said that the automotive industry is facing huge challenges and that the future of car manufacturers depends on competitiveness.

“To achieve this, we need to address every area,” the spokesman said. “Given the changed conditions, significant cost optimisations are necessary.”

He also said that “confidential” talks are underway with the representatives of the workers about a new set of measures.

Employee requests

Porsche has signalled that it wants to discuss cutting personnel costs with employee representatives. Neither Porsche nor the company’s works council gave details on the targeted scope of the savings.

Main works council president Ibrahim Aslan told Stuttgarter Nachrichten and Stuttgarter Zeitung, “The main works council and the IG Metall [union] are talking to the management about the future package so that Porsche and the workforce are well prepared for the future.”

Formal negotiations have not started yet, he stressed.

Previously scheduled staff meetings are scheduled for next week. The works council took a clear position: “We need job security until at least 2035, and we expect a clear commitment from management to our German Porsche plants.”

Currently, around 23,000 employees at the plants, including Zuffenhausen and Weissach, have been promised job security until mid-2030. After that, forced redundancies are possible.

1,900 jobs will be cut by 2029.

The first cost-cutting package was announced in February, cutting 1,900 jobs by 2029. In July, outgoing chief executive Oliver Blume announced another round of savings internally.

Porsche expects a significant drop in profits this year due to a strategic shift back to producing more cars with ICEs. The cost of this restructuring is 3.1 billion euros ($3.6 billion), Porsche said in mid-September.

• Also See: Porsche Announced Over 1 Billion Euros In Losses