Porsche plans to cut 1,900 jobs as profits slide

Porsche plans to cut 1,900 jobs in Germany as part of cost-cutting measures to reverse sliding profitability amid weak electric vehicle demand and “challenging geopolitical and economic conditions.” The job losses will affect workers at Porsche’s main plant in Stuttgart-Zuffenhausen and its R&D site in Weissach.

A year ago, Porsche CEO Oliver Blume lauded his decision to approve the Taycan electric saloon for production at his first-ever supervisory board meeting as CEO back in 2015. “We were talking about billions in investment. It required a lot of courage,” he recalled.

A decade after that meeting, however, Porsche has to backtrack on its electric ambitions after a grim year: Taycan sales plummeted 49%, demand in China fell 28%, and the company’s share price tumbled 53% from its 2023 peak.

The fallout has pushed Porsche to the brink of a significant leadership overhaul. The company recently announced that the contracts of deputy chairman and chief financial officer Lutz Meschke and sales and marketing director Detlev von Platen could be terminated. The pair were blamed for the company’s downturn and a faltering share price.

No forced layoffs

Regarding the planned job cuts, “the goal is to reduce the number of jobs at Porsche with the main sites in Zuffenhausen and Weissach by 15% by 2029,” a Porsche spokesperson said.

“There will be no forced layoffs. The brand plans to reduce headcount through voluntary measures, such as early retirement and severance packages, and will take a ‘restrictive approach’ to new hires,” he added.

Porsche, majority-owned by the Volkswagen Group, employs around 42,000 people globally and 23,650 in Stuttgart and the surrounding region. In 2024, it initiated job cuts by not renewing the contracts of 1,500 fixed-term employees, while another 500 are now ending their contracts. The spokesperson said this was determined to be insufficient.

Forecast altered

Porsche warned on February 6th that expenses tied to expanding its product portfolio with more combustion engine and plug-in hybrid models will hurt its profitability this year.

It expects its profit margin for 2024 to be at the lower end of its forecast range at around 14%, down from an initial projection of 15% to 17%. For 2025, the objective is even lower, between 10% and 12%.

“Porsche is still in a comparatively good position. But there are many challenges to overcome, such as the delayed ramp-up of electromobility or the challenging geopolitical and economic conditions,” declared Andreas Haffner, HR director at Porsche, in the local newspaper Stuttgarter Zeitung.