Volkswagen’s Model Is In Crisis. Its Porsche Unit Will Shed 20% Of Its Jobs Over The Next Decade

Volkswagen's Porsche is set to shed about 20% of its jobs over the next decade, the company announced.

Concretely, Porsche management and labor representatives said 5,000 additional jobs will be made to avoid compulsory redundancies. They will be done through natural attrition and voluntary schemes. Overall, 9,000 jobs will be cut by 2035. The unit's workforce stood at about 42,600 by the end of 2024.

Volkswagen CEO Oliver Blume has recently warned employees that the German automotive giant may need to eliminate roughly 50,000 additional jobs on top of previously announced workforce reductions.

According to an internal memo seen by Reuters last week, Blume told staff that Volkswagen has identified a cost disadvantage of about 20% compared with rival automakers. To close that gap, management has calculated what it described as a "theoretical deduction" of another 50,000 jobs worldwide, effectively confirming for the first time that the company is evaluating reductions totaling up to 100,000 positions across the group.

Europe's largest automaker faces one of the most challenging periods in its recent history. "We are currently assessing across all brands, companies and regions how many adjustments are actually necessary and feasible," Blume wrote in the memo, signaling that no final decisions have yet been made regarding the additional reductions.

The automaker has been under increasing financial pressure from several directions. Billions of euros in tariff-related costs have weighed on earnings, while fierce competition in China, the world's largest automotive market, has eroded Volkswagen's market position. At the same time, the company is trying to modernize its German manufacturing operations as demand shifts toward electric vehicles and lower-cost competitors gain ground.

There is growing frustration among employee representatives, who have demanded greater transparency about the company's long-term restructuring strategy after Blume presented his plans to Volkswagen's supervisory board.

According to sources familiar with the discussions cited by Reuters, labor representatives on the board pushed back against management's proposals.

The plants that could be affected include facilities in Emden, Hanover, Zwickau and Neckarsulm, all of which play significant roles in Volkswagen's German production network. "As of today, we still cannot confirm competitive use cases for the plants of Emden, Hanover, Zwickau and Neckarsulm in the 2030s," Blume wrote in the memo, raising fresh concerns about the future of several major production sites.