Massive reductions at Porsche: 5,000 employees face job losses

According to the information, the job cuts should be carried out in a socially acceptable manner – primarily through natural fluctuation, demographic effects, partial retirement and voluntary termination agreements. IG Metall and the employers’ association Südwestmetall were also involved in the negotiations. The aim is to strengthen competitiveness and secure as many jobs as possible in the long term.

Billion investment in the Porsche home

The so-called future package therefore also provides for investments totaling 2.1 billion euros. This is intended, among other things, to ensure that the two-door sports cars continue to roll off the assembly line in Zuffenhausen and that development work remains concentrated in Weissach. This will be financed through a comprehensive package of measures. “It is intended to significantly reduce personnel costs and make work at the locations more flexible and productive.”

In concrete terms, this means, among other things: wage increases will be partially withheld until 2035, the Christmas bonus will decrease and the employee bonus will be more closely linked to the company’s success. Large parts of management will forego increases in base pay in 2027 and 2028. In the future, home office should only be possible on a maximum of eight days per month instead of twelve.

CEO Michael Leiters, who has been in office since the beginning of the year, described the package as “good for Porsche”. It makes it possible to strategically realign the company. Now it’s time to deliver together. One thing is clear: “Only if we achieve our goals and are economically successful can we give our employees the security they need.”

For the head of the general works council, Ibrahim Aslan, the package has a signal effect: they were able to convince the employer that investing in the two locations was an opportunity. The fact that compromises would have had to be made was part of the negotiations. “The package was hard won. Now we have to implement it together with the board,” said Aslan.

Round of savings follows round of savings

The future package that has now been decided is already the second major round of savings. In February 2025, management and the works council agreed to cut around 1,900 jobs in the Stuttgart region by 2029. In addition, the temporary employment contracts of around 2,000 employees expired. But it wasn’t just at the headquarters that savings were made recently: Porsche has also cut jobs at the Leipzig plant, and three subsidiaries with a total of around 500 employees have also been or are still being closed.

In total, the sports car manufacturer will cut more than one in three jobs in its home country in the coming years. At the end of 2024, Porsche had around 22,200 employees in the Stuttgart region; a year later there were still around 20,600. At the end of 2025, the group employed almost 41,800 people worldwide. Leiters had already announced that he wanted to significantly slim down Porsche. Negotiations with the works council have been ongoing since last fall – but with interruptions due to the change at the top of the company.

Unprecedented profit slump

The cost-cutting measures are necessary because Porsche has been in crisis for some time. The consolidated surplus of the former VW profitmaker collapsed by 91 percent to 310 million euros in 2025. The decline continued in the first quarter, albeit at a slower pace.

The reasons for the development are the enormous crisis in China business, the US customs policy and the lower demand for electric models. In addition, there was the restructuring of the company and groundbreaking strategic questions: the decision alone to develop and produce more cars with combustion engines again cost billions. The company also expects burdens in the high three-digit million range in 2026.

Porsche plants underutilized

A look at the sales figures shows how profound the problem is: sales fell by a tenth in 2025 – and with 279,400 vehicles sold, they were at their lowest level since the Corona year 2020. The situation was particularly dramatic in China. Between 2021 and 2025, sales figures in the People’s Republic have more than halved.

A trend that has continued and even increased so far this year. But that doesn’t fit with the Swabians’ oversized structures: the production network was once planned for 350,000 to 400,000 vehicles per year. Porsche is currently heading towards 250,000 or less. The plants are not operating at capacity, but many costs continue to run as usual.

What Leiters plans to do with Porsche

The Porsche boss, who has been in office since January, is therefore envisioning a slimmer sports car manufacturer that can make big profits even with significantly fewer vehicles sold. At the general meeting a few weeks ago, Leiters outlined the basic principles of his strategy, which he plans to present at a capital market day at the beginning of October. The product range should be streamlined and the number of model variants reduced. At the same time, the manager is thinking about new vehicles in higher-margin segments – both above the two-door sports cars and above the Cayenne.

Recently, Leiters did not expect a return to the dream returns of close to 20 percent: in the medium term, 10 to 15 percent of sales should remain as profit. “The significant improvement in our economic performance will come primarily with our future products.” But that takes time. Management wants to present on Wednesday how Porsche did in the first half of the year. The forecast was recently confirmed.

The dilemma with Wolfsburg

It will be exciting to see what consequences the agreement in Wolfsburg will have. Because VW CEO Oliver Blume – who was also Porsche boss until the end of 2025 – is currently trying to push through his own, much tougher austerity package there. Four German locations of VW and Audi as well as up to 50,000 jobs worldwide are at risk – in addition to the 50,000 jobs that are to be cut across the group by 2030.

The savings compromise is not a gift to Porsche employees. And agreements to secure employment are not uncommon in the German auto industry. At Porsche, the guarantee until the end of 2035 is now more generous than at Volkswagen and Audi. Furthermore, factory closures are not up for debate. And this despite the fact that Porsche’s factories are among the most expensive in the group.

The deal could therefore also get Blume, who wants to tighten his austerity package by the end of the year, into trouble. Especially because some of the same people sit on the supervisory boards. At the forefront: representatives of the Porsche and Piëch families. The works councils at VW and Audi also know this – and are likely to measure any agreement against the Porsche compromise.