What Is Causing the Job Reductions at Porsche and Volvo? | Carscoops

      The two car manufacturers have revealed significant job reductions as they face market difficulties and reorganize for future competitiveness.

      Volvo and Porsche plan to eliminate approximately 6,900 jobs worldwide.

      Porsche attributes its decision to the slow adoption of electric vehicles, pushing the company to increase the number of internal combustion engine models in its lineup.

      Both manufacturers have mentioned a tough environment characterized by a trade conflict and the shift toward electrification.

      European carmakers are under pressure as they prepare for an uncertain future, with workforce downsizing becoming increasingly common. Last year, Volkswagen set a precedent by announcing plans to cut over 35,000 jobs in Germany by 2030.

      Now, Porsche and Volvo are following suit, citing “challenges” as the reason for their job cuts. Porsche specifically has introduced a strategic realignment plan that involves “adjusted product and corporate planning” due to the “significantly longer transition period” needed for electric mobility.

      Because of the slower-than-anticipated shift to electric vehicles, Porsche will provide more models with combustion engines and plug-in hybrid options. The company also shared plans for a “realignment of battery activities.”

      In a notable move, Porsche has initiated a “comprehensive cost and restructuring program,” leading to around 3,900 job reductions by 2029. Additionally, the company intends to discuss a “structural package” with its works council to enhance efficiency in the medium and long term.

      Porsche CEO Dr. Oliver Blume succinctly stated, “The world has changed” and “We are facing a fierce storm.” However, he also expressed confidence, saying, “We accept the challenge. We have a plan. We are taking action. And we’re not wasting any time.”

      Volvo is set to cut 3,000 jobs globally as part of its previously disclosed “cost and cash action plan.” This latest measure aims to eliminate redundancies and will predominantly impact office-based roles in Sweden, constituting roughly 15 percent of the global office workforce.

      The automaker clarified that the cuts will involve about 1,000 consultants and 1,200 employees in Sweden. These job reductions are expected to happen this fall, with the company anticipating restructuring costs to reach up to SEK 1.5 billion (approximately $157.6 million / £116.2 million / €138.5 million).

      Volvo CEO Håkan Samuelsson remarked, “The actions announced today have been difficult decisions, but they are vital as we work towards building a stronger and more resilient Volvo Cars.” He further stated, “The automotive industry is currently facing a challenging period. To tackle this, we must enhance our cash flow generation and structurally reduce our costs.”