Porsche to cut up to 20% of employees to contain the gap caused by China

Porsche has reached an agreement with its works council that provides for the cut of another 5,000 jobs by 2035. Added to the previous packages, the layoffs reach about 9,000 vacancies — approximately one in five jobs at the manufacturer, which ended 2024 with 42,600 employees. The announcement was made on Monday after months of negotiation with the IG Metall union and the Südwestmetall employers’ association.

None of these departures will be a forced resignation. According to the company, the reduction will come from natural retirements, demographic effect, expansion of the partial retirement program and voluntary termination agreements. In exchange, Porsche extended the guarantee of employment and maintenance of the factories until the end of 2035 and promised €2.1 billion in investments in the Stuttgart-Zuffenhausen plant, where the two-door sports cars are born, and in the Weissach development center.

What employees deliver in return

The account has another side. According to the agreement, 3.5% of the salary adjustment already negotiated and future increases are postponed until 2035. In 2027 and 2028, senior management waives an equivalent contribution. The Christmas bonus also shrinks: the voluntary portion paid by the company drops from 45% to 5% by 2035, which reduces the benefit from up to 100% to 60% of a monthly salary. The home office, previously allowed for 12 days a month, is now valid for eight.

As immediate compensation, the manufacturer will pay a transformation bonus of €1,500 to each employee in August. IG Metall members receive €411 more, for a total of €1,911, plus an extra day off per year.

China and electric companies explain the bill

The package comes in a difficult semester. Porsche delivered 122,306 cars from January to June, 16% less than in 2025. In China, there were 14,501 units, a drop of 32% — less than Germany itself, with 14,938. The company attributes the global decline to the end of production of the 718 combustion, the strong basis of comparison of the electric Macan and the end of tax incentives for electrified vehicles in the United States.

Michael Leiters took the helm in January with the mission of reorganizing the business. In the half-year balance sheet, released on Wednesday (29), revenue fell to €17.23 billion, but operating income rose 34% to €1.35 billion, and the forecast for the year was maintained. Chief Financial Officer Jochen Breckner warned that the new package of cuts is expected to weigh a few hundred million euros in the second half. The details of the strategy until 2035 will be presented in October, at the company’s Capital Markets Day.