German sports car manufacturer Porsche has warned its employees to prepare for a new round of cost-cutting measures amid the deepening crisis in the country's automotive industry.

The new measures will build upon the previously announced 1,900 job cuts in February, while parent company Volkswagen is in the process of eliminating 35,000 jobs by 2030.

“The business model that has sustained us for decades no longer works in its current form,” reads a letter from management to employees.

“The conditions under which we operate have deteriorated drastically in a short period of time,” the letter further states.

Negotiations are expected to begin in the second half of the year with the goal of “securing the company’s long-term future,” though no specific measures have been outlined.

Management cites intensified competition from domestic Chinese manufacturers, tariffs imposed by U.S. President Donald Trump, and the weakening of the dollar against the euro as key sources of pressure on Porsche.

The transition to electric vehicle production has also added strain, proving costly and difficult to implement amid weak consumer interest.

“The situation remains serious, and the sector is changing extremely rapidly,” the company further warns.

In April, Porsche lowered its profit and sales forecasts for the year, citing a “persistently challenging market environment” in China.

Porsche vehicle deliveries in China dropped by 28% in the first half of the year, and globally by 6%. |BGNES