Porsche to cut 5,000 jobs via early retirement in agreement with workers

Deal guarantees core German sites, $2.4 billion investment

Porsche announced Monday it will cut 5,000 jobs through early retirement and voluntary measures, deepening a restructuring that has already eliminated 3,900 positions. The cuts are part of a broader agreement with worker representatives that guarantees the future of the company’s core German sites and commits $2.4 billion in investment through 2035.

The sports-car maker has been hit by a sharp decline in Chinese sales, where deliveries fell to 41,938 in 2025 — less than half the 2021 peak — and dropped another 32% in the first half of 2026 compared with the prior-year period. “We are by no means experiencing a short-term downturn, but rather a structural shift,” said Chief Executive Michael Leiters at the company’s annual general meeting last month. “Customer expectations are changing. Competition has also become much more dynamic.”

U.S. tariff policies pose another challenge. Porsche imports all the cars it sells in the United States from Europe and is not large enough to consider local production. The new levies cost the company approximately $800 million in 2025, according to the company.

The company’s electric vehicle strategy has also weighed on its performance. In 2022, Porsche went public with expectations that 80% of its sales would be fully electric by 2030. It wrote off billions of dollars in investments last year after it became clear that scenario was unlikely.

After four profit warnings, former CEO Oliver Blume stepped down last year to focus on his other role running Volkswagen Group, which owns a controlling stake in Porsche. Leiters, a former Porsche engineer who later worked at Ferrari and ran McLaren, took over.

Leiters has begun to outline his strategy, including plans to narrow and simplify Porsche’s product range. “Our portfolio has become too complex,” he said at the AGM. He has also moved to sell off noncore assets, including the company’s stakes in Bugatti and Rimac. He is set to deliver a full strategy in early October.

Under the agreement with the union, workers accepted more modest bonuses and pay increases, as well as less remote working — eight days a month rather than the previously agreed 12. The deal gives the company “the opportunity to strategically realign our company and invest in our competitiveness,” Leiters said.

Porsche had roughly 42,000 employees at the end of 2025.