The Workforce Pays for Job Security
Those who remain at Porsche will have to make substantial concessions. Employees will temporarily forgo 3.5 percentage points of current and future collectively agreed pay rises until 2035. Christmas bonuses will be reduced from as much as a full month’s salary to no more than 60% of monthly pay.
Discretionary bonus payments will also be tied more closely to the company’s profits and financial performance. Employees will be allowed to work remotely on eight days a month rather than 12. Break arrangements and production cycle times will also change. In 2027 and 2028, senior managers will forgo a corresponding share of any increase in their basic pay.
In return, employees will receive a one-off transformation bonus of €1,500 ($1,700). IG Metall members will receive €1,911 ($2,200), along with one additional day off each year and an annual voucher worth €200 ($230).
Porsche’s crisis stems largely from the slump in Chinese sales. Higher US tariffs are also weighing on the business, while heavy investment in electric vehicles has yet to pay off. The company now expects to deliver only about 250,000 vehicles in 2026, compared with roughly 320,000 three years ago.
Operating profit fell from €5.6bn ($6.4bn) to €413m ($470m) in 2025. In the first half of 2026, Porsche generated €1.35bn ($1.5bn) in operating profit and achieved a margin of 7.8%. The figure had previously been around 15%.
Mercedes Hit by China Slump
Just hours after Porsche announced the cuts, Mercedes-Benz also reported weak results. Profit at its passenger car division fell by 26% in the second quarter, while deliveries declined by almost 7% to 417,865 vehicles.
China was again the main source of weakness, with Mercedes selling 30% fewer cars there than in the same period last year. Growth in Europe and the United States failed to make up for the decline, prompting the company to lower its forecast. Mercedes now expects full-year vehicle sales and revenue to come in slightly below their 2025 levels.
Group revenue totaled around €32bn ($36.4bn) in the second quarter, with the passenger car business accounting for almost €23bn ($26.2bn).
Electric vehicle sales were a notable exception. Mercedes sold 52,852 fully electric cars in the second quarter, an increase of 51% from a year earlier. Deliveries in Europe rose by 87%. The company therefore raised its expected share of electric vehicles in total sales from 23% to 25%.
The van business proved more resilient. Deliveries rose slightly to around 94,000 vehicles, revenue increased by just over 5% and operating profit grew by almost 3%. The financial services division performed even better, increasing its operating profit by 70%. In the core passenger car business, however, weak demand in China remains the main drag on results.
