Porsche to Cut 1 in 5 Employees, Restructure 9,000 Jobs

[Financial News, New York = Reporter Lee Byung-chul]  Porsche is launching a major restructuring plan that will cut 9,000 jobs, or one-fifth of its workforce, by 2035. The company is moving to reduce costs as sales in China, once its biggest source of profit, have plunged and its shift to electric vehicles has fallen short of expectations.
According to Reuters and other outlets on the 27th local time, Porsche reached an agreement with labor representatives to eliminate an additional 5,000 jobs. The company will reduce headcount through natural attrition and voluntary retirements, and will not carry out forced layoffs.
This latest move extends an already ongoing restructuring effort. Porsche decided in February last year to cut 3,900 jobs, then announced another 500 cuts this year along with the closure of a subsidiary. With the additional 5,000 positions, the total reduction will reach 9,000. That amounts to about 21% of the company's 42,600 employees as of the end of 2024.
Porsche's sweeping restructuring reflects a combination of weak performance in China and setbacks in its electric vehicle strategy. Michael Leiters, who took office as CEO earlier this year, entered the role with the task of overhauling the company's business structure to address the sharp drop in China sales and the underperformance of its EV business.
Market watchers say the layoffs are an unavoidable response to declining sales.
Daniel Schwarz, an auto analyst at Metzler, said, "The scale of the layoffs almost matches the drop in sales." He added, "Since China is unlikely to return to the high growth it once enjoyed, restructuring to cut costs is unavoidable."
Alongside the restructuring, Porsche will continue investing in its future. Labor and management have agreed to keep its production facilities in Germany open until at least the end of 2035, and the company plans to invest a total of 2.1 billion euros in its Stuttgart-Zuffenhausen plant and its Weissach research and development center.
Volkswagen, Porsche's parent company, is also intensifying its restructuring efforts. Volkswagen CEO Oliver Blume is pushing a plan to expand group-wide layoffs to around 100,000 jobs. He stressed that major cost cuts are necessary to maintain competitiveness as Chinese automakers step up their push into the European market.
Blume also warned that four Volkswagen Group factories, including an Audi plant, could be shut down after 2030.




[email protected] Reporter Lee Byung-chul Reporter