Porsche to Cut 5,000 More Jobs Amid China Slowdown and Weak EV Demand, Total Nears 9,000

German automaker Porsche reportedly reached an understanding with labour representatives to downsize by 5,000 jobs amid faltering demand and rising competition. The additional job cuts come after the company recently decided to lay off 3,900 people as the luxury carmaker grapples with a collapsing operating margin. In all, the company would cut around one in five jobs by 2035.

Porsche is also preparing for relatively lower production volumes compared with 2025, as it works on safeguarding profitability. In Q3 2025, Porsche reported a $1 billion loss, which analysts described as one of the toughest crises in the continent's auto sector.

Metzier automotive analyst Daniel Schwarz told Reuters that the job cuts are related to declining sales, and are unavoidable if the company wants to reduce costs, because 'a return to strong growth in China is not expected.'

Under the deal, Porsche guaranteed to keep sites open for another five years, until the end of 2035, as well as make $2.39 billion worth of investments in ​its main factory of ​Stuttgart-Zuffenhausen and its ⁠R&D centre in Weissach. The latest contract with IG Metall and the Südwestmetall employers' association also sees Porsche offering a bit of stability by extending 'employment and site protection' at facilities until 2035.

Impacted management and employees will see 3.5% of their expected pay hikes reportedly deferred until 2035. In 2027 and 2028, top management will waive an equivalent contribution from increases in basic remuneration. Meanwhile, work from home allowances will be scaled back to a maximum of eight days a month, from 12 currently.

There are also signing bonuses of $1,705 for all Porsche employees next month, while IG Metall members will get an extra $467, plus one additional day off annually along with a voucher of $227 per year.

'The employees are contributing, and this must pay off: now the company has a responsibility to implement the promised investments and to lead Porsche back on a successful course,' said Tamara Hübner, a representative of IG Metall Stuttgart.

Porsche's Aging Product Line-up

Porsche's gas-powered Macan will go out of production this month, which could introduce some vulnerability in its portfolio as the vehicle's direct successor won't be ready until 2028.

Porsche also stopped the production of 718 models in October 2025, and won't bring the Boxster and Cayman models back until 2027. The sports cars will return with electric drivetrains, alongside overhauled combustion-engine versions.

Other German carmakers, including Mercedes-Benz and BMW, are also engaging in cost-cutting activities to compete with Chinese rivals while absorbing the impact of high US tariffs.

Porsche's primary headwind is coming from China, where sales fell by 26% last year. Once considered a key growth market, the company found it increasingly challenging to compete with domestic manufacturers who offer affordable alternatives.

'In China, massive investments must be made in the software user experience and new business models,' Harald Klein of the DSW investor association had stated earlier.

The workforce reductions at Porsche come as its parent, Volkswagen Group, is also expanding its restructuring efforts. The automotive group is also considering ramping up its layoff plans to downsize by 100,000 jobs, reflecting broader cost pressures across Europe's automotive industry.

For Porsche, the immediate focus remains on restoring profitability while navigating weaker demand, product transitions, and rising competition in China.