Porsche to axe one in five jobs by 2035 as China, EV woes bite

By Rachel More and Ilona Wissenbach

BERLIN, July 27 (Reuters) - German luxury carmaker Porsche will cut around one in five jobs by 2035, with 9,000 positions to be axed in total, as parent Volkswagen and its brands restructure in the face of weak demand and stiff competition.

In a deal announced on Monday after months of negotiations, Porsche management and labour representatives agreed to 5,000 additional job cuts that avoid compulsory redundancies through measures like natural attrition and voluntary schemes.

These measures follow a first package of 3,900 job cuts agreed in February 2025 and another 500 announced by CEO Michael Leiters this year linked to the closure of subsidiaries.

Porsche had a workforce of some 42,600 at the end of 2024.

On becoming CEO at the start of the year, Leiters was tasked with overhauling the business after sales in Porsche's once highly lucrative China market collapsed and its EV strategy stalled.

The job cuts roughly correspond to the decline in sales volume, said Daniel Schwarz, automotive analyst at investment bank Metzler. "They are unavoidable in order to reduce costs, because a return to strong growth in China is not expected," he said.

Other German carmakers including Mercedes-Benz and BMW are also cutting costs as they navigate the shift to electric vehicles in a race with Chinese rivals while absorbing the impact of high tariffs.

The deal announced by Porsche also includes guarantees to keep sites open for another five years, until the end of 2035, as well as €2.1 billion ($2.39 billion) in investments in its main factory of Stuttgart-Zuffenhausen and its R&D centre in Weissach, the company and the works council said in a statement.

The announcement followed a meeting of Porsche's supervisory board last Wednesday, in which the committee gave its blessing to the additional cuts.

Leiters' predecessor Oliver Blume remains CEO of Volkswagen, having ended a dual leadership role that was opposed by many investors.

Blume is now pushing for a doubling of job cuts across the Volkswagen group to 100,000, measures that he says are necessary to remain competitive as more Chinese brands come to Europe.

He has also warned that four of the group's factories, including one belonging to premium brand Audi, are threatened with closure after 2030.

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(Reporting by Rachel More; Editing by Miranda Murray and Susan Fenton)