The cuts — amounting to about eight percent of Audi’s global workforce — were aimed at boosting “productivity, speed and flexibility” at its factories in its home market, the manufacturer said.

“The economic conditions are becoming increasingly tougher, competitive pressure and political uncertainties are presenting the company with immense challenges,” Audi, a subsidiary of Volkswagen, said in a statement.

It is the latest bad news from the ailing auto sector in Europe’s biggest economy, which has been hit hard by a stuttering shift to electric cars, fierce competition in key market China from local rivals and weak demand.

Audi, headquartered in the Bavarian city of Ingolstadt, said the cuts would be in areas like administration and development and be carried out in a “socially responsible” manner, meaning there would be no compulsory redundancies.

The automaker employs about 88,000 people worldwide, including 55,000 in Germany.

The job cuts are part of a series of measures, which also includes slashing bureaucracy, that Audi said were aimed at saving it one billion euros ($1.1 billion) a year.

The carmaker however also said it was planning to plough about eight billion euros into its two biggest sites, Ingolstadt and Neckarsulm in Germany, in part to help in the transition to electric vehicles (EV).

This would include investments in producing another electric model in the entry-level segment as well in artificial intelligence.

Audi has been hit hard by slowing EV demand, and in February closed a plant in Belgium that employed about 3,000 people and manufactured high-end electric vehicles.

The carmaker’s deliveries of fully-electric vehicles slid eight percent year-on-year in 2024, to some 164,000.

Deliveries in the Chinese market, accounting for nearly 40 percent of the global total, slipped by about 11 percent.

Audi’s parent company Volkswagen — which makes 10 brands in total — announced in December it would cut 35,000 jobs at its namesake VW brand in Germany by 2030.