Piousbox

Porsche is preparing to eliminate more than one-third of its German workforce as part of a sweeping cost-cutting plan aimed at safeguarding its remaining employees and production facilities through 2035.

The Stuttgart-based sports car manufacturer will cut another 5,000 positions at its Zuffenhausen headquarters and Weissach development center. Combined with previously announced reductions, approximately 8,900 jobs will be eliminated.

According to Die Zeit, the company intends to avoid compulsory layoffs by relying on natural attrition, partial retirement programs, and voluntary severance agreements.

"This package creates the opportunity to strategically realign our company," Porsche CEO Michael Leiters said. "Only if we achieve our goals and remain economically successful can we provide our employees with long-term security."

Employees will also face a range of financial concessions under the restructuring agreement.

Porsche plans to defer 3.5 percent of current and future collectively negotiated pay increases for workers covered by company-specific salary agreements. Senior executives will also forgo part of their scheduled base salary increases in 2027 and 2028.

The company's contribution to employees' Christmas bonuses will be gradually reduced, lowering the maximum payout from the equivalent of one month's salary to 60 percent. Future bonus payments will also become more closely linked to Porsche's profitability and overall business performance.

Remote work will be reduced from 12 days to eight days per month, while break schedules and production cycle times will also be revised.

The agreement was negotiated with the IG Metall union and the Südwestmetall employers' association. According to Junge Freiheit, union members will receive an additional paid day off each year and a €200 voucher. All regular employees will receive a one-time transformation payment of €1,500 in August, increasing to €1,911 for IG Metall members.

The latest cuts follow an earlier plan to eliminate around 1,900 jobs in the Stuttgart region by 2029, along with the expiration of roughly 2,000 temporary contracts. Porsche has also reduced staffing in Leipzig and announced the closure of three subsidiaries employing more than 500 people.

The automaker has been squeezed by a sharp decline in Chinese sales, U.S. tariffs, and heavy investments in electric vehicles that have yet to generate the expected returns. The growing influx of lower-cost Chinese vehicles into Europe has added further pressure to Germany's struggling automotive sector.

The challenges extend beyond Porsche. Audi recently lowered its revenue and profitability forecasts after second-quarter net profit dropped about 21 percent to €563 million.

Volkswagen is pursuing an even broader restructuring program that could reportedly eliminate up to 100,000 jobs by 2030 while downsizing or closing several factories.

Earlier this month, Hildegard Müller, president of the German Association of the Automotive Industry, warned that the industry's downturn had become so severe that some German plants might ultimately need to be sold to foreign manufacturers to avoid permanent closure.

"We will not be able to keep all the factories and suppliers open this way," Müller said, arguing that Germany and Europe must adapt to "significant changes" and abandon costly practices and benefits that are no longer economically sustainable.