The cuts will be made in the coming years in Germany, at the luxury brand’s Stuttgart headquarters and the firm’s nearby research centre, Porsche said.

Hit by high manufacturing costs at home, weak demand, fierce competition and a sluggish shift to EVs, Germany’s flagship auto sector is battling a growing crisis.

“We have many challenges to overcome,” Porsche’s human resources chief Andreas Haffner said in an interview with daily the Stuttgarter Zeitung.

He cited “the delayed ramp-up of electromobility and challenging geopolitical and economic conditions”, although he insisted none of the looming cuts would be made via compulsory redundancies.

The maker of the 911 sports car employs about 42,000 workers worldwide. It had already started cutting staff in Germany last year by letting temporary contracts expire, but has decided it needs to go further.

Porsche had long been one of more profitable subsidiaries of the Volkswagen empire, Europe’s top auto manufacturer that makes 10 brands in total.

But its fortunes have faded, and it suffered a three-percent fall in deliveries worldwide last year — driven by a 28-percent drop in China.

Germany’s auto titans have all been losing business in China, where they had invested heavily in recent decades, due to fierce competition from new local rivals, particularly when it comes to EVs.

They have also been hit by a slower than expected shift to EVs, after having ploughed huge sums into the electric shift.

Illustrating the fast-changing landscape, Porsche said last week that it planned to focus on producing more models with combustion engines and plug-in hybrids in a bid to boost profits.

In a sign of growing problems, Porsche earlier this month announced the surprise departure of two top executives after they reportedly clashed with the brand’s boss.

Other parts of Volkswagen are also facing upheaval, with the group announcing in December plans to cut 35,000 jobs at the core VW brand in the coming years.