Porsche is preparing for another major round of workforce reductions as the luxury sports car maker confronts one of the most difficult periods in its modern history.
German media reports indicate the company is considering cutting up to 5,000 additional jobs, with some reports suggesting the restructuring could continue through 2035 as Porsche seeks to restore profitability following collapsing margins, slowing electric vehicle demand, weaker sales in China, and mounting tariff-related costs.
The reported plans come only months after Porsche had already announced thousands of job reductions, underscoring the scale of the challenges facing one of Germany’s most profitable automotive brands.
While Porsche has not officially confirmed the latest figures, reports emerged as the company’s supervisory board met to discuss an expanded restructuring program under Chief Executive Michael Leiters.
For a company long regarded as the profit engine of the Volkswagen Group, the proposed cuts highlight how dramatically conditions have changed in the global premium automotive market.
Restructuring Could Extend Well Into the Next Decade
According to Reuters, citing German publications Manager Magazin and Bild, Porsche is preparing another round of workforce reductions involving between 5,000 and 6,000 employees by 2035.
The reports suggest the new measures would effectively double the scale of Porsche’s previously announced redundancy program, which already included approximately 3,900 job cuts. A Porsche spokesperson declined to comment on the reports.
The restructuring follows the appointment of Michael Leiters as CEO earlier this year. Since taking over, Leiters has begun reshaping the company by simplifying operations, reducing management layers, closing non-core subsidiaries, and shifting Porsche’s strategy toward higher-margin products.
Reuters previously reported that Porsche eliminated more than 500 positions by shutting down three subsidiaries as part of its initial restructuring efforts. The company also reduced the size of its executive board and integrated several business functions to improve efficiency.
The broader restructuring roadmap is expected to be presented later this year and will outline Porsche’s long-term strategy through 2035.
Weak EV Demand and China Slowdown Hit Profitability
Several factors have combined to create intense financial pressure on Porsche. One of the biggest challenges has been the slower-than-expected adoption of premium electric vehicles.
Porsche invested heavily in electrification over the past decade, expecting rapid growth for models such as the Taycan and future electric sports cars. Instead, demand has softened in several key markets while many luxury buyers continue choosing gasoline-powered or hybrid models.
As a result, Porsche has delayed several EV launches and revised its product strategy to include more combustion-engine and hybrid models than originally planned. China, historically one of Porsche’s strongest markets, has also become a major source of concern.
According to Reuters, margins at Porsche have fallen sharply as Chinese demand weakened and domestic manufacturers intensified competition in the premium EV segment. The company has also faced growing pressure from U.S. tariffs and higher production costs, forcing management to accelerate cost-cutting efforts.
Earlier this month, Porsche reported that first-half vehicle deliveries fell 16% to 122,306 vehicles, the weakest first-half sales performance in six years. Deliveries in China dropped by roughly 32%, while North American sales also declined compared with the previous year.
The company attributed the slowdown to changing market conditions, the end of production for some combustion models, and weaker EV demand. These declining sales have significantly affected profitability.
Reuters reported that Porsche’s operating margin has dropped from the double-digit levels that once made it one of Volkswagen Group’s most profitable brands to just 1.1% last year, creating pressure for management to act aggressively.
Cost Cutting Becomes the Top Priority
Rather than pursuing sales growth at any cost, Porsche is increasingly emphasizing profitability.
Chief Executive Michael Leiters has repeatedly indicated that the company intends to return to a “value over volume” strategy, prioritizing high-margin vehicles instead of maximizing production.
That approach includes simplifying Porsche’s product lineup, reducing the number of model variants, streamlining operations, and concentrating resources on core models such as the iconic 911, the Cayenne, and premium SUVs.
According to The Wall Street Journal, Porsche’s turnaround strategy also involves selling or winding down non-core businesses while improving operational efficiency across manufacturing, engineering, and administration. The company has already exited several investments outside its primary automotive operations as part of that effort.
Labor representatives and management have reportedly been negotiating the latest restructuring package for several months. Any significant workforce reductions are likely to face resistance from German unions, which traditionally play a powerful role in major industrial restructuring decisions.
Part of a Larger Volkswagen Group Overhaul
Porsche’s restructuring is occurring alongside broader cost-cutting efforts throughout the Volkswagen Group.
Reuters recently reported that Volkswagen management has warned that up to 100,000 job reductions may eventually be required across the group as it attempts to close an estimated 20% cost disadvantage compared with global competitors.
Those discussions include previously announced cuts at Volkswagen, Audi, and Porsche, while several German factories remain under review as part of a broader restructuring program.
The entire German automotive industry is facing similar pressures. Chinese manufacturers continue gaining market share with competitively priced electric vehicles, while slowing demand, rising labor costs, expensive software development, and changing consumer preferences have forced several European automakers to reconsider their long-term strategies.
For Porsche, those challenges are especially significant because its premium positioning leaves less room for aggressive price reductions without damaging brand value.
What Comes Next?
Although Porsche has not officially confirmed the reported job-cut figures, the company’s direction is becoming increasingly clear.
Management appears committed to reshaping Porsche into a leaner, more profitable business capable of navigating slower EV adoption, declining Chinese demand, and a more competitive global automotive market.
The expected restructuring is likely to include additional workforce reductions, continued simplification of the product portfolio, tighter investment discipline, and greater emphasis on high-margin vehicles rather than sales volume.
The company’s long-term strategic roadmap, expected later this year, should provide greater clarity on how Porsche intends to balance traditional combustion-powered sports cars, hybrid technology, and electric vehicles over the next decade.
For employees, suppliers, and investors, however, one message is already evident. Porsche’s transformation is no longer a short-term cost-cutting exercise. It is evolving into a multi-year restructuring that could reshape one of Germany’s most iconic automotive brands well into the 2030s.
With profitability under pressure from multiple directions, management believes deeper structural changes are necessary to restore the company to the financial performance that once made Porsche the benchmark for premium automotive margins.
Global Luxury Market Faces a Period of Transition
Porsche’s restructuring also reflects broader changes taking place across the global luxury automotive industry. Demand for high-end vehicles remains resilient in many regions, but buyers have become more selective as economic uncertainty, higher interest rates, and evolving consumer preferences reshape purchasing decisions.
At the same time, premium automakers are investing billions of dollars in electrification, software development, battery technology, and digital services while continuing to support traditional combustion-engine models.
Managing these parallel investments has become increasingly expensive, placing pressure on operating margins even for historically profitable brands.
Analysts say Porsche’s ability to execute its turnaround will depend on maintaining the exclusivity of its brand while adapting to changing market conditions.
The company continues to enjoy strong customer loyalty, particularly for the 911 and Cayenne, but future growth will likely require a balanced product strategy that includes gasoline, hybrid, and electric models rather than relying on a rapid transition to fully electric vehicles.
Investors will also be watching upcoming quarterly results for signs that cost-cutting measures are beginning to improve profitability and cash flow.
If the restructuring successfully lowers operating expenses without affecting product quality or brand appeal, Porsche could emerge from the downturn in a stronger competitive position.
However, if demand in China remains weak and global EV adoption continues to slow, additional operational changes may become necessary before the company achieves its long-term financial targets.
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