The luxury carmaker Porsche will cut 1,900 posts by the end of the decade as its profit margins are hit by rocky market conditions.

The cuts will see a reduction in overall staffing numbers by 15% by 2029 at its main sites in southwestern Germany, Stuttgart-Zuffenhausen and Weissach.

This process began back in 2024 when 1,500 fixed-term contracts expired.

Now, another 500 fixed-term contracts are expiring, although the 1,900 cuts will come on top of this.

Employees will be encouraged to leave voluntarily by accepting early retirement or severance packages, and Porsche will take a “restrictive approach” to hiring, the firm confirmed this week.

The carmaker blamed the job losses on “the delayed ramp-up of electromobility” and “challenging geopolitical and economic conditions”.

“Now it is a matter of setting the course at an early stage and taking a close look at the adjustments we need to make in order to be successful in the future,” the firm told Euronews. It added: “In addition to a number of other measures, this also includes personnel costs.”

Porsche’s investments in electric vehicles have notably backfired as weak demand has prompted the firm to walk back its EV targets.

Last week, the manufacturer announced it would ramp up production of its combustion engine vehicles and hybrids, which will cost Porsche €800m this year.

The carmaker’s Taycan vehicles saw a 49% decline in sales in 2024.

Porsche also saw an overall sales decline of 28% year-on-year in China, which the firm attributed to “the continuing challenging economic situation in this region”.

Global sales declined by a more modest 3%.

Porsche forecasts that its profit margins will be between 10 and 12%, below the long-term target of 20%.

Volkswagen, Porsche’s parent company, last year announced it would lay off thousands of workers, shut three factories in Germany, and reduce pay for remaining staff.

The firm finds itself in financial difficulty as demand in China has slumped, whilst cheap, Chinese cars are undercutting their products in European markets.

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VW managed to reach a deal shortly before Christmas with union leaders, averting original restructuring plans.

By 2030, VW still plans to cut more than 35,000 jobs across the country in a “socially responsible manner”, in order to save around €15bn.