Porsche plans up to 4,000 additional job cuts as European auto overcapacity deepens

Porsche plans up to 4,000 additional job cuts

Porsche is preparing another deep round of cost-cutting that could eliminate up to 4,000 positions, according to a Handelsblatt report. The cuts would focus on management and administration, with roughly 30% of capacity at the Weissach development site under review. A company spokesperson did not confirm the number but said a comprehensive "future package" is being negotiated with employee representatives and will be unveiled by the end of July.

We are currently examining all areas to see how we can become leaner and more efficient. The focus is initially on management structures.

The new reductions come on top of an earlier plan. In March 2025, under then-CEO Oliver Blume, Porsche announced 4,000 job cuts to be implemented by 2030 without layoffs. That package is largely complete. Then in March 2026, current CEO Michael Leiters signaled further cuts. By 2029, around 1,900 positions in the Stuttgart region are to be eliminated through socially responsible measures, about 2,000 temporary contracts have already expired, and three subsidiaries were closed in May, affecting 500 employees.

Overcapacity across the European auto industry

Porsche's cuts are part of a broader crisis. A BCG analysis found that nearly one in three European auto plants is superfluous. Volume manufacturers are running at an average utilization of just 58%, while premium makers fare slightly better at 65%. BCG expects European plants to remain below 60% utilization well into the 2030s.

Volkswagen is considering closing four German plants (Hannover, Zwickau, Emden, and Audi's Neckarsulm site). Stellantis plans to cut European capacity by 800,000 units to 3.85 million cars, a 17% reduction. Mercedes-Benz is shrinking global capacity from over 2.5 million vehicles in 2024 to 2.2 million by 2028. BMW produced 2.5 million vehicles last year, 8% fewer than in 2023. Industry expert Stefan Bratzel expects BMW and Mercedes to shed a combined 16,000 jobs, a mid-single-digit percentage of their workforces.

China slump and the "Value over Volume" pivot

Porsche's troubles are compounded by a sharp sales decline in China, its largest market. Deliveries there fell more than 26% in 2025. The company is reducing its dealership network from 116 to about 80 locations and has already scaled back fast-charging infrastructure. Porsche is pursuing a "Value over Volume" strategy, prioritizing high-margin models over unit sales.

Volkswagen faces a choice: reinvent itself consistently or be broken up into individual parts in the long term.

The transition to electric mobility has also created a gap: combustion-engine model sales have collapsed, leaving a large void. Porsche's 2025 revenue was €36.27 billion, but operating profit slumped to just €413 million.

What comes next

The details of the new savings package will be announced before Porsche's summer plant holidays at the end of July. The negotiations between management and labor representatives are ongoing. The outcome will signal how deeply the sports-car maker is willing to cut to restore profitability amid a structural downturn in European auto manufacturing.