BERLIN, Germany: German luxury carmaker Porsche will eliminate about one in five jobs by 2035, cutting a total of 9,000 positions as it restructures its business to cope with weak demand, a sharp decline in China sales and slower-than-expected progress in electric vehicles.

The company said on July 27 it had reached an agreement with labor representatives after months of negotiations to eliminate an additional 5,000 jobs through measures including natural attrition and voluntary departures, avoiding compulsory redundancies.

The latest cuts follow a package of 3,900 job reductions agreed in February 2025, and another 500 announced earlier this year by CEO Michael Leiters in connection with the closure of subsidiaries.

Porsche employed about 42,600 people at the end of 2024.

Leiters, who took over as chief executive at the start of the year, was tasked with reviving the automaker after sales in its once-lucrative China market slumped and its electric vehicle strategy lost momentum.

The planned workforce reduction broadly reflects the decline in Porsche's sales volumes, said Daniel Schwarz, an automotive analyst at investment bank Metzler. "They are unavoidable to reduce costs, because a return to strong growth in China is not expected," he said.

Porsche joins other German automakers, including Mercedes-Benz and BMW, in cutting costs as they navigate the transition to electric vehicles while facing growing competition from Chinese rivals and the impact of high tariffs.

As part of the agreement, Porsche also committed to keeping its sites open until the end of 2035 and investing 2.1 billion euros (US$2.39 billion) in its main factory in Stuttgart-Zuffenhausen and its research and development center in Weissach, according to a joint statement from the company and its works council.

Porsche's supervisory board approved the plan during a meeting on July 22.

Leiters succeeded Oliver Blume, who stepped down from Porsche's top role while remaining chief executive of parent company Volkswagen after ending a dual leadership arrangement that had drawn criticism from investors.

Blume is now pursuing broader cost-cutting across the Volkswagen Group, aiming to double planned job reductions to 100,000 as the automaker seeks to remain competitive against an increasing number of Chinese brands entering Europe. He has also warned that four Volkswagen factories, including one operated by premium brand Audi, could face closure after 2030.