German luxury automaker Porsche will cut roughly one in five jobs by 2035, eliminating 9,000 positions overall as parent company Volkswagen Restructures its operations to cope with weak vehicle demand and intensifying global competition.
The labor reduction plan was finalized on Monday following months of negotiations between Porsche management and labor representatives. The newly agreed agreement adds 5,000 job cuts to earlier reduction targets. Management confirmed that forced redundancies will be avoided, with reductions achieved through natural attrition and voluntary severance schemes.
This latest agreement follows a initial package of 3,900 job cuts established in February 2025 and an additional 500 reductions announced earlier this year by Chief Executive Officer Michael Leiters tied to subsidiary closures. At the end of 2024, Porsche maintained a global workforce of approximately 42,600 employees.
Leiters, who assumed the CEO role at the beginning of the year, was tasked with overhauling the luxury brand after sales collapsed in its previously lucrative Chinese market and its electrification strategy stalled.
Daniel Schwarz, an automotive industry analyst at investment bank Metzler, noted that the headcount reductions directly align with the manufacturer’s lower production scale.
“They are unavoidable in order to reduce costs, because a return to strong growth in China is not expected,” Schwarz told Reuters, pointing out that the job cuts roughly correspond to the decline in sales volume.
The headwinds facing Porsche mirror wider structural pressures across the European automotive sector. German competitors including Mercedes-Benz and BMW are similarly pursuing cost-cutting measures as they navigate the transition to electric vehicles, compete against rapid expansion from Chinese brands, and absorb the financial impact of high trade tariffs.
Despite the workforce downsizing, the agreement reached between Porsche and its works council includes binding operational guarantees. Plant locations will receive site protections extending operational guarantees through the end of 2035. Additionally, the joint statement confirmed that Porsche will commit €2.1 billion (US$2.39 billion) in capital investments toward its primary manufacturing facility in Stuttgart-Zuffenhausen and its research and development center in Weissach.
The agreement received formal approval last Wednesday during a meeting of Porsche’s supervisory board.
The restructuring unfolds against a broader operational shakeup across the Volkswagen Group. Oliver Blume, Leiters’ predecessor at Porsche, now serves exclusively as CEO of Volkswagen after ending a dual-leadership arrangement that had faced opposition from institutional investors.
Blume is pushing to double job cuts across the entire Volkswagen Group to 100,000 positions, describing the reductions as essential to remaining competitive as more Chinese brands enter the European market. Blume has also warned that four group production facilities, including a plant belonging to premium brand Audi, face potential closure after 2030.