Porsche AG has reached an agreement with its general works council on a broad restructuring program that will eliminate an additional 5,000 jobs by 2035 while committing €2.1 billion in investment across its key German sites.
The measures come ahead of the automaker’s planned launch of its “Sportwagenschmiede 35” strategy in October and are intended to improve competitiveness following weaker financial performance, lower sales in China, U.S. tariff pressures and heavy investment in vehicle electrification.
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During the first half of 2026, Porsche’s operating margin declined to 7.8%, well below the company’s historical profitability levels.
Workforce Reduction and Investment Commitments
Porsche said the planned job reductions will primarily be achieved through retirements, partial retirement, voluntary departures and severance agreements rather than compulsory layoffs.
Including previously announced measures and reductions at subsidiaries, approximately 9,000 positions will ultimately be affected. Those figures include 1,900 jobs scheduled for elimination by 2030, announced in early 2025, as well as the decision not to renew 2,000 fixed-term employment contracts.
In exchange, Porsche has extended employment guarantees for workers at its Zuffenhausen production plant and Weissach research and development center until 2035, committing not to implement compulsory redundancies for operational reasons during that period.
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The company also pledged €2.1 billion in investment to support future production of its two-door sports cars at Zuffenhausen and strengthen engineering activities at Weissach.
Chief Executive Officer Michael Leiters said the agreement provides a foundation for the company’s long-term competitiveness.
“The Future Package is good for Porsche. It gives us the opportunity to strategically realign our company and invest in our competitiveness.”
Employees Agree to Financial Concessions
To help finance the investment program, employees agreed to several changes to compensation and working conditions.
Under the agreement, 3.5% of current and future collectively negotiated pay increases will be withheld for much of the workforce through 2035. Christmas bonuses will also be reduced from as much as 100% of a month’s salary to 60%, while the maximum number of remote working days will decrease from 12 to eight per month.
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The company will also tighten production schedules and adjust paid “Steinkühler” break arrangements. Senior managers have agreed to forgo equivalent base salary increases in 2027 and 2028.
As part of the negotiations, employees covered by collective bargaining agreements will receive a one-time €1,500 transformation bonus in August 2026. Members of the IG Metall union will receive €1,911, along with an additional vacation day and a €200 voucher.
General Works Council Chairman Ibrahim Aslan acknowledged the lengthy negotiations.
“The package was hard-fought. Now we have to implement it together with the Executive Board.”
Focus Shifts to Future Production
The agreement does not cover Porsche’s Leipzig plant, which operates under a separate labor agreement.
Attention remains on plans to transfer Cayenne production from Bratislava to Leipzig and develop a new model, codenamed M1, which is expected to replace the discontinued combustion-engine Macan.
The labor agreement could also influence restructuring discussions elsewhere within the Volkswagen Group, including at Volkswagen and Audi, where cost-reduction measures continue to be evaluated.
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