Porsche to Cut 9,000 Jobs by 2035: Inside CEO Michael Leiters' Cost-Cutting Plan

How the Two Restructuring Packages Add Up

The job cuts come in two waves. The first package, agreed in principle in February 2025 under former CEO Oliver Blume, targeted 3,900 positions . The second package, approved by the supervisory board on July 22, 2026, and announced five days later, added another 5,000 cuts . Combined with roughly 500 jobs eliminated through earlier subsidiary closures, the total reaches approximately 9,000 .

How Reductions Will Be Achieved

All cuts will avoid compulsory redundancies. Porsche will reduce headcount through natural attrition (not replacing departing employees), demographic measures (retirement), and voluntary separation schemes .

Job Security for Remaining Workers

In exchange for the deep staff cuts, Porsche has agreed to a "Future Package" with the works council and IG Metall union that includes:

• Employment and site protection extended through to the end of 2035 for the main Stuttgart-Zuffenhausen plant and the Weissach research & development centre
• €2.1 billion ($2.39 billion) in cumulative investments over that period in those two sites

Cuts to Employee Pay and Bonuses

Porsche's workforce will absorb significant compensation reductions:

• Smaller pay increases: Over the life of the agreement, a total of 3.5 percentage points will be withheld from current and future collective wage increases
• Reduced Christmas bonuses: Holiday bonus payments are being cut
• Capped annual special payments: Annual special bonuses for employees are capped at €1,500

Additionally, Porsche scrapped its annual profit-sharing bonus for the 2025 financial year for the first time since 2007 — a stark signal of the financial strain .

Where the Cuts Are Concentrated

• Germany: The vast majority of cuts target Porsche's major German sites, primarily Stuttgart-Zuffenhausen and Weissach
• Subsidiaries (first wave under Leiters): In May 2026, Porsche announced the shutdown of three non-core subsidiaries, eliminating more than 500 jobs: Cellforce Group (battery cell production, ~50 employees), Porsche eBike Performance (~350 employees), and Cetitec (automotive software, ~90 employees across Germany and Croatia)

The Four Pressures Driving the Cuts

Four major forces hit simultaneously:

1. Falling China sales: Porsche's China business collapsed, with sales dropping 26% in 2025 alone. One major investor publicly stated the current business model was "no longer viable" for the China market
2. U.S. tariffs: High tariffs on imported vehicles and parts directly hurt profitability in its second-biggest market
3. Costly EV strategy reversal: Leiters inherited an overly ambitious electric-vehicle push. Writing down and reversing parts of that strategy — including cancelling or delaying planned EVs — has largely offset Porsche's recent profits
4. Broader Volkswagen Group restructuring: Oliver Blume (Leiters' predecessor, who remains VW Group CEO) is pushing for massive cuts across the group, including a goal of eliminating 100,000 jobs group-wide, with four factories threatened with closure after 2030

EV Lineup Struggles and the Electric 718 Uncertainty

• Current EV lineup: Porsche sells the Taycan (sedan and Cross Turismo) and the all-electric Macan (on the PPE platform). Both have seen weaker-than-expected demand, particularly in China and North America
• Electric 718 cancellation risk: Leiters is actively considering scrapping the planned electric 718 Boxster and Cayman models entirely, citing development delays and rising costs from what Bloomberg described as an "overly ambitious EV bet" . Production of the outgoing combustion-engined 718 generation has already ended, creating a gap in the lineup
• Cellforce Group shuttered: Porsche's high-performance battery start-up Cellforce was closed in May 2026 because the "technology-open powertrain strategy" meant it no longer had a viable long-term path

Models Porsche Is Betting On

• The 911 sports car: Leiters has doubled down on the 911 as the brand's icon and profit engine
• New models positioned above the 911: Leiters plans to add higher-margin, ultra-luxury models that sit above the 911 in Porsche's lineup to boost per-vehicle profitability
• An electric SUV: The CEO's future plan focuses on a new electric SUV, which is expected to replace or sit alongside the combustion-engine Cayenne, targeting higher volumes and margins
• Premium combustion and hybrid models: The company is also retaining and upgrading combustion and plug-in hybrid powertrains for core models (Cayenne, Panamera), having walked back earlier plans for full electrification of the entire lineup by 2030

The Bottom Line

Porsche's restructuring is a direct response to the simultaneous collapse of its China business, the high cost of reversing its EV-first strategy, tariff pressure, and parent-company cost-cutting mandates. The deal trades deep headcount reduction (9,000 over nine years) for long-term site and job guarantees for remaining workers. The company is betting its future on the 911, ultra-luxury halo models above it, and a new electric SUV — while slashing costs, reducing bonuses, and potentially cancelling the electric 718 before it ever launches.