Porsche Cuts 9,000 Jobs by 2035 as China Sales Collapse, EV Strategy Falters
The luxury automaker reduces its workforce by 21% while pivoting back to combustion engines and investing €2.1 billion in German facilities.
Porsche AG announced plans to eliminate approximately 9,000 positions by 2035, representing roughly 21% of its global workforce, as the luxury automaker grapples with a dramatic sales collapse in China and a struggling transition to electric vehicles.
The job reductions will be achieved through natural attrition, early retirement programs, and voluntary buy-outs rather than forced layoffs. The total includes an additional 5,000 cuts agreed upon in July 2026, building on roughly 4,000 positions previously announced for elimination.
The restructuring comes as Porsche confronts a stark reversal in its most critical growth market. China deliveries fell 28% in 2024 to 56,887 units, down from 79,283 units in 2023. At its 2021 peak, Porsche delivered 95,671 units in China. The downturn coincides with intensifying competition from domestic Chinese EV manufacturers including BYD and Nio, which have eroded the brand's pricing power and market share.
Under new CEO Dr. Michael Leiters, who assumed leadership on January 1, 2026, Porsche has executed a notable strategic pivot. The company initially pursued aggressive electrification, exemplified by the Taycan and plans for an electric-only Macan. However, high pricing and customer preference for gasoline engines prompted a reversal: Porsche is now developing combustion engine options for the Macan and 718 series, models previously slated for EV-only production.
Despite the workforce reduction, Porsche is committing €2.1 billion in cumulative investment through 2035 to its main production facility in Stuttgart-Zuffenhausen and its Weissach research and development center. The spending underscores the company's attempt to modernize core operations while navigating capital constraints that limit ambitious electric vehicle programs.
Industry observers note the shift reflects broader challenges facing European luxury automakers. Many miscalculated both the pace of EV adoption and the volatility of the Chinese market, leaving them exposed as local competitors rapidly scaled production and technology.
For electric vehicle advocates, Porsche's retreat signals potential delays in high-performance electrification. The company's need to rely on profitable internal combustion models to subsidize future EV development suggests a slower rollout of next-generation electric technology than initially promised.
The restructuring represents more than cost-cutting: it is an acknowledgment that the Porsche of the late 2010s, which could afford bold bets on unproven categories, now operates under tighter financial discipline. The path forward balances near-term profitability against long-term electrification goals, with combustion engines remaining central to the product lineup longer than previously planned.