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.
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.
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 program and voluntary severance agreements," the company said, AFP reported.
With job cuts already announced last year, the firm therefore plans to reduce its workforce of over 30,000 by 8,900 people.
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.
Workers there would enjoy employment and site protection until 2035, it said after negotiations with the general works council and trade unions.
"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.
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.
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.
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.
Measures included delaying the introduction of some fully electric cars, and extending the life of some combustion engine and hybrid models.
