Porsche trades extra 5,000 job cuts for 2035 site guarantees

Porsche has agreed to cut a further 5,000 jobs by 2035, taking total planned reductions to around 9,000, representing roughly one in five of its workforce, as parent Volkswagen Group continues to heavily restructure in the face of waning demand and intensifying competition. Management and labour representatives reached the deal on 27 June, following months of protracted negotiations.

The agreement was successfully negotiated to sidestep compulsory redundancies, relying instead on natural attrition through retirement and ordinary resignation. However, there are incentives for employees to voluntarily depart in the form of an expanded partial-retirement programme. 

The latest cuts come on top of roughly 3,900 reductions already agreed to in February 2025, and an additional 500 tied to subsidiary closures. In exchange, Porsche guaranteed all of its sites will remain open through 2035 and committed €2.1bn (US$2.4bn) to its Stuttgart-Zuffenhausen factory and Weissach R&D centre. Handelsblatt has reported up to 4,000 of the new cuts will instead fall on management and administration, although around 30% of Weissach’s capacity remains under review.

The latest slate of cuts are arguably justified by the difficult financial backdrop Porsche is navigating. The automaker’s 2025 revenue fell to €36.27bn from €40.08bn while operating profit collapsed to just €413m from a healthy €5.64bn in 2024, leaving it with an operating margin of roughly 1%. That leaves a brand built on premium pricing power—and high per-unit margins—performing appreciably worse than many of the volume manufacturers it once towered above. Around €4.7bn in exceptional charges tied to its strategic retreat on electrification, as well as battery costs and US tariffs, were responsible for a large portion of the damage. 

However, it is Porsche’s performance in China that is responsible for what is arguably the most damaging figure. Deliveries there fell 32% to 14,501 vehicles in H1 2026, fewer than the 14,938 handed over in Germany and down from a 2022 peak of roughly 95,000. This is a collapse so substantial that no restructuring programme can truly offset the lost volumes without either a dramatic market recovery that neither analysts nor Chief Executive Michael Leiters expect, or a business fundamentally resized around a smaller Chinese consumer base.

Product performance is splitting in a telling direction. Only the 911 grew, up 19% to 30,534 deliveries on demand for GTS, Turbo and GT variants, while the Taycan—the flagship electric model meant to define Porsche’s future—fell 25% to 6,219 and the wider Macan line dropped 22%. Porsche is reportedly weighing whether to shelve battery-electric versions of the 718 Boxster and Cayman altogether.

The Porsche restructuring is but one piece of a dramatic overhaul of the Volkswagen Group, a process that is still ongoing without a clear vision. Chief Executive Oliver Blume is pushing to double group-wide cuts to 100,000, with four German plants, Emden, Hanover, Zwickau and Neckarsulm, still lacking any confirmed use beyond 2030, even after labour representatives blocked his wider plan at a supervisory board vote earlier this month. Lower Saxony, the group’s second-largest shareholder, also sided against factory closures.

Five-year site guarantees and reliance on attrition allowed Porsche to avoid a confrontation with the works council, but they also lock in a fixed cost base against a revenue line still falling, limiting how quickly Porsche could respond if China’s decline worsens further. That trade-off looks less like resolution than a deferral of harder choices due at Porsche’s Strategy 2035 capital markets day this autumn.