Porsche to shed 5,000 jobs by 2035 under German factory pact

• Porsche will cut 5,000 jobs by 2035 through natural attrition, partial retirement, and voluntary severance, protecting its main German sites without compulsory redundancies.
• The job cuts come amid Volkswagen's challenges, including a 3% revenue drop forecast and high costs, driven by weak Chinese demand and slower electric car sales.
• Porsche plans €2.1 billion investment in German factories, alongside workforce reductions, management simplification, and reduced R&D spending to improve profitability.

STUTTGART – Porsche agreed to eliminate 5,000 jobs by 2035 as part of a deal with labour officials that protects its main German sites and rules out compulsory redundancies.

The positions will be cut through a mixture of natural attrition, expanded partial-retirement programmes and voluntary severance agreements, Porsche and its general works council said on July 27. Employment and site protections at Zuffenhausen and Weissach will be extended through the end of 2035.

The agreement underscores the mounting pressure across Porsche parent Volkswagen, which last week warned that group revenue may fall as much as 3 per cent this year as its China slump deepens.

VW has a number of underused factories, is saddled with costs roughly 30 per cent higher than some competitors and needs to trim at least €10 billion (S$14.7 billion) more in overhead expenses.

Once Volkswagen’s most reliable profit engine, Porsche has been hit particularly hard by the collapse in Chinese demand for German luxury cars and weaker-than-expected sales of electric models including the Taycan.

The sports carmaker is also cutting costs and reconsidering its product strategy after a rapid deterioration in profitability.

The latest pact follows an earlier plan to reduce Porsche’s workforce by about 3,900 by the end of the decade, including 2,000 temporary workers. The company, which employs roughly 40,000 people, has pledged to remove some management layers, simplify its organisation and reduce research and development spending.

The new agreement includes €2.1 billion of investment at Zuffenhausen and Weissach as part of an effort to shore up its German operations. BLOOMBERG