Porsche, the German maker of the 911 sports car, is cutting deeper into its workforce as weak demand for electric vehicles and a brutal sales slump in China squeeze its profits. The company has set a goal of shrinking staff at its two main German sites — the Stuttgart-Zuffenhausen factory and the Weissach development center — by 15%, or about 1,900 jobs, by 2029. And the cuts keep growing: on May 8, new chief executive Michael Leiters closed three Porsche subsidiaries and eliminated roughly 500 more positions, pushing the total well beyond the original plan.

The job reductions land on a company that, until recently, was one of the auto industry’s most reliable money-makers. Porsche, which is majority-owned by Volkswagen AG, employs around 42,000 people, with more than half based in the Stuttgart region. The 1,900 cuts alone equal about 5% of its German workforce.

The trouble traces back to a bet that has not paid off as hoped: electric cars. Porsche leaned hard into EVs, but demand across Europe has come in slower than expected, and competition from cheaper, fast-improving Chinese electric brands has been fierce. Sales in China, once a huge and growing market for the brand, have fallen sharply. In response, the company is shifting course and putting more money back into gasoline and hybrid models — an expensive reversal. Porsche has said the restructuring will cost about €3.1 billion (roughly $3.6 billion) and will drag down profits this year.

For now, Porsche says it will avoid forced layoffs. A job-security agreement protects workers at its main sites from compulsory redundancies until mid-2030, so the company is relying on softer tools: not replacing people who leave, offering early and partial retirement, and letting temporary contracts expire. It began that process in 2024 by declining to renew 1,500 fixed-term contracts, with another 500 now ending. Human-resources board member Andreas Haffner acknowledged the strain, telling a German newspaper the company has “many challenges to overcome.”

The pressure has only intensified under Michael Leiters, who took over as chief executive this year. Alongside the May job cuts, Porsche shut three smaller units — battery maker Cellforce, an e-bike division and an electronics business — and earlier in the spring sold its stakes in the supercar venture Bugatti Rimac and the Rimac Group, signs that Leiters is shrinking the company toward its core.

Workers are uneasy about where it ends. Ibrahim Aslan, the head of Porsche’s general works council, has warned that as many as one in four jobs at the German sites — potentially 5,500 positions — could be at risk if management follows through on proposals to outsource entire divisions and shift work to lower-wage countries. He is pushing to extend job protections to 2035. “I’m not Santa Claus, who grants wishes,” he said of the board’s demands for concessions.

For the wider economy, Porsche’s retrenchment is part of a painful reckoning across the German auto industry. Parent Volkswagen has wrestled with whether to close domestic plants for the first time in its history, and weak EV sales and Chinese competition have forced carmakers across Europe to rethink their costs. Germany’s manufacturing heartland, long a source of stable, well-paid jobs, is feeling the squeeze.

For car buyers, the story is a reminder that the once-confident march toward all-electric driving has hit speed bumps. Demand has not grown as fast as the industry assumed, and even a premium brand like Porsche is pumping the brakes on its electric plans and leaning back on the combustion engines that built it.

For Porsche’s workers, the message is bleaker: a brand synonymous with success and fat profit margins is now in cost-cutting mode, and the people who build its cars are absorbing the blow.

JBizNews Desk
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