Porsche to Cut 5,000 More Jobs as Sales Slump – What It Means for the Industry

A chilly wind has blown in from China, and Porsche is preparing to weather the storm with further cuts.

According to Automotive News, Porsche's supervisory board, half of whose members are workers' representatives, has approved a plan put forth by CEO Michael Leiters to cut a further 5,000 jobs in Germany. The company had previously agreed to a reduction of 3,900 German jobs with its unions, and currently employs around 23,000 people in Germany.

It's expected administrative functions and research and development personnel, especially at the development centre at Weissach outside of Stuttgart, will be heavily impacted by this latest job cull.

As part of the company's streamlining efforts, Porsche will be simplifying its product and trim offerings, reducing the need for engineering capability. Mr Leiters has reportedly confirmed the ranks of management personnel, including senior managers, will also be trimmed.

The job losses and belt tightening are due to a sharp downturn in sales. In 2023 the company sold a record 320,221 vehicles globally, but expects to sell only around 250,000 units this year, with a sharp decline in the Chinese market forecast.

Porsche projects it will stay in the black this year with an operating profit margin of between 5.5 and 7.5 per cent. While many manufacturers would be happy with these margins, they are a far cry from double-digit figures the brand once boasted. Mr Leiters is targeting a return to 15 per cent margins in the medium term, fuelled by cost reductions and new products.

In July last year Porsche approved a successor to the petrol-powered Macan, to launch in 2028. With the petrol Macan ending production this month, and the second-generation Macan being EV-only, Porsche will soon have a large hole in its lineup. The company also announced its new flagship three-row SUV would shift from an EV platform to one supporting both petrol and plug-in hybrid drivetrains.

But while Porsche is adding new models, a recent report indicated the brand could cut the Taycan and Cayenne Coupe, and the combustion-powered versions of the next-generation 718 lineup may not see the light of day.