Porsche said it would cut 5,000 jobs, the latest warning sign from Germany's troubled car industry.
The sports-car maker announced the cuts Monday as part of a broader agreement with worker representatives and their powerful union. Under the deal, the company will reduce staffing levels through early retirement and other voluntary measures while guaranteeing the future of its core German sites and investing the equivalent of $2.4 billion through 2035.
The move to reduce costs is part of new Chief Executive Michael Leiters' plan to revive the fortunes of the storied automaker, which has been hit by a collapse in sales in China, U.S. tariff increases and a premature bet on electric vehicles.
The pact with workers "gives us the opportunity to strategically realign our company and invest in our competitiveness," Leiters said.
Workers also agreed to more modest bonuses and pay increases as well as less remote working -- eight days a month rather than the previously agreed 12.
The latest cuts come on top of the elimination of 3,900 positions agreed by Porsche and its labor force last year under former CEO Oliver Blume. The company had roughly 42,000 employees at the end of 2025.
After four profit warnings, Blume stepped down last year to focus on his other job running Volkswagen Group, which owns a controlling stake in Porsche. He made way for Leiters, a former Porsche engineer who went on to work at Ferrari and run British racing-car maker McLaren.
Leiters gave hints of his plan to revive the brand at last month's annual general meeting, outlining plans to narrow and simplify Porsche's product range. "Our portfolio has become too complex," he said.
He has also moved to sell off noncore assets, including the company's stakes in racing-car brand Bugatti and electric supercar maker Rimac. Leiters is set to deliver a full strategy in early October.
Porsche's key problem has been China, where its sales last year fell to 41,938, less than half the 2021 peak. A damp real-estate market, new taxes and the rise of local carmakers have deterred Chinese consumers from buying expensive imported cars.
There is little sign that the market is recovering, with Porsche sales in China down another 32% in the first half of 2026 compared with the prior-year period.
"We are by no means experiencing a short-term downturn, but rather a structural shift. Customer expectations are changing," said Leiters at the AGM. "Competition has also become much more dynamic."
President Trump's tariff policies pose another challenge. Porsche imports all the cars it sells in the U.S. from Europe and it isn't big enough to contemplate local production. The new levies cost the company around $800 million last year.
Adding to Porsche's woes is the slow adoption of electric vehicles. In 2022, when enthusiasm for the new technology was at a high, the automaker went public with expectations that 80% of its sales would be full EVs in 2030. It wrote off billions of dollars of investments last year when it became clear that scenario was extremely unlikely.
Write to Stephen Wilmot at stephen.wilmot@wsj.com
(END) Dow Jones Newswires
July 27, 2026 10:46 ET (14:46 GMT)
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