Porsche to cut 5,000 jobs by 2035 under German factory deal

Porsche has reached a landmark agreement with labor representatives to eliminate 5,000 positions across its German operations by 2035, using voluntary measures such as natural attrition, expanded partial-retirement schemes, and severance packages to avoid compulsory layoffs. The deal secures employment and site protections at its Zuffenhausen and Weissach facilities through the end of 2035 and includes a €2.1 billion investment in those plants. The move comes as Porsche’s parent company, Volkswagen AG, faces severe headwinds from a sharp decline in Chinese demand for German luxury vehicles and sluggish electric-vehicle sales, particularly for models like the Taycan. Volkswagen has already warned of a potential 3% revenue drop this year amid deepening struggles in China, where it is burdened by underutilized factories and cost structures roughly 30% higher than some rivals. Porsche, once Volkswagen’s most profitable division, is now recalibrating its cost structure, trimming management layers, simplifying its organizational structure, and reducing R&D spending. The new plan builds on an earlier workforce reduction target of about 3,900 roles by the end of the decade, which included 2,000 temporary workers. Porsche employs approximately 40,000 people globally.