British luxury carmaker Bentley Motors on Tuesday recorded its seventh consecutive year of profitability, but uncertain times mean the British luxury carmaker is cutting jobs ahead of its belated electric future.
Bentley said the layoffs could affect 275 positions, or 10% of its non-manufacturing employees. Bentley framed the cuts as an efficiency measure linked to its next phase of growth, but it is a significant move for the small British company that is part of the Volkswagen Group (VWAGY).
“We are making some difficult decisions to ensure the long-term competitiveness of the business, including an organizational adjustment,” Bentley CEO Frank-Steffen Walliser said in a statement.
Deliveries to customers fell 5% over the year, driven largely by continued market weakness in China. Despite this, Bentley still reported an operating profit of €216 million ($247.8 million) on revenue of €2.6 billion ($2.98 billion) by 2025, with an operating return on sales (a measure of profit margin) of 8.3%.
Bentley’s ability to earn more revenue per vehicle through customization and higher models, such as its S variants, helped boost margins. Revenue fell 1%, but stronger pricing, model mix and sustained demand growth for bespoke Mulliner helped offset lower volumes.
Read more: How to find the best luxury car insurance
Walliser pointed out to Yahoo Finance in November the weakness in China and the high-end consumer market in general, when he described the luxury market as still mired in “uncertainty,” particularly in the United States and Europe, but especially in China.
Bentley’s decision to reduce staff was labeled as a way to ensure the “long-term competitiveness” of the business, but comes as the company begins the next phase of its electric vehicle rollout.
Under its Beyond100+ strategy, Bentley had committed to going all-electric by 2030, a goal that was pushed back to 2035, and then the company pivoted and said it would continue selling plug-in hybrids along with electric vehicles beyond that deadline.
Read more: Buy an electric car? What to know about electric vehicle insurance costs.
While the company remains on track to launch its first electric vehicle next year, Walliser said it had “a lot of work to do” to convince its customers to opt for a full electric vehicle.
Lamborghini, Bentley’s fellow Volkswagen Group partner, is also finding that its owners are avoiding electric vehicles in the rarefied air of ultra-luxury automobiles.
Lamborghini CEO Stephan Winkelmann confirmed in February that the Italian brand was phasing out its Lanzador EV, initially scheduled for launch in 2028 but delayed numerous times.