German luxury carmaker Porsche has announced plans to cut about 9,000 jobs by 2035 as part of a major restructuring programme aimed at reducing costs amid weakening demand, intense competition and slowing growth in key markets.
The agreement, reached after months of negotiations between Porsche’s management and labour representatives, will see around one in five jobs eliminated through voluntary measures, including natural attrition and voluntary exit schemes, avoiding compulsory redundancies.
The latest deal, announced on Monday, provides for an additional 5,000 job cuts, adding to the 3,900 positions slated for elimination under a restructuring package agreed in February 2025. It also includes another 500 job losses announced earlier this year by Chief Executive Officer Michael Leiters following the closure of some subsidiaries.
Porsche employed about 42,600 people at the end of 2024, meaning the planned reductions will affect roughly 21 per cent of its workforce by 2035.
Leiters, who assumed office at the beginning of the year, was tasked with revamping the luxury carmaker after a sharp decline in sales in China, once one of Porsche’s most profitable markets, and setbacks to the company’s electric vehicle strategy.
Automotive analyst Daniel Schwarz of investment bank Metzler said the scale of the workforce reduction reflects the company’s declining sales.
“They are unavoidable in order to reduce costs, because a return to strong growth in China is not expected,” Schwarz said.
Porsche’s restructuring comes as Germany’s automotive industry grapples with slowing global demand, the costly transition to electric vehicles, increasing competition from Chinese manufacturers and the impact of higher tariffs.
Fellow German carmakers Mercedes-Benz and BMW have also embarked on cost-cutting programmes as they adjust to changing market conditions and intensifying competition in the electric vehicle segment.
Despite the job cuts, Porsche said it had agreed with its works council to keep its production sites operational until the end of 2035. The agreement also includes investments worth €2.1 billion ($2.39 billion) in its main manufacturing plant in Stuttgart-Zuffenhausen and its research and development centre in Weissach.
The restructuring plan received approval from Porsche’s supervisory board during a meeting last Wednesday before being formally announced.
The measures also come amid a broader restructuring across the Volkswagen Group. Former Porsche CEO Oliver Blume, who remains Chief Executive Officer of Volkswagen, is pushing to double planned job reductions across the group to 100,000 positions, arguing that the cuts are necessary to maintain competitiveness as Chinese automakers expand into Europe.
Blume has also warned that four Volkswagen Group factories, including one operated by premium brand Audi, could face closure after 2030 if market conditions fail to improve.
