German sports car maker Porsche on Friday told employees to brace for another round of cost-cutting, adding further strain to Germany’s already troubled auto industry.
Any additional measures will come on top of the 1,900 job cuts announced in February. Parent company Volkswagen is already on track to cut 35,000 jobs by 2030.
“Our business model, which sustained us for decades, no longer works in its current form,” Porsche management said in a letter to staff, excerpts of which were shared with AFP. “Our operating conditions have deteriorated dramatically in a short period of time.”
Negotiations are expected in the second half of the year to “secure the company’s long-term future,” though specific measures were not disclosed.
Management pointed to fierce competition in China from domestic rivals, tariffs imposed by U.S. President Donald Trump, and a weaker dollar against the euro as key challenges.
The high costs of ramping up electric vehicle production amid lukewarm demand are also weighing heavily on the company. “The situation remains serious, and the sector is evolving very dynamically,” the letter said.
In April, Porsche slashed its full-year profit and sales forecasts, citing “continued challenging market conditions” in China. Vehicle deliveries in China fell 28% in the first half of the year, while global deliveries dropped 6%.
