Not recovering: Porsche will cut 20% of its workforce within a decade
A drop in sales in China, a failed electrification policy, and a parent company in deep trouble: the cash machine of the Volkswagen Group until a few years ago finds itself in a severe crisis and will significantly reduce its workforce.
Porsche continues its aggressive efficiency drive. After announcing the agreed departure of approximately 4,400 employees over the last year and a half, the Stuttgart-based sports car manufacturer, once the most profitable automaker in the industry, is announcing its intention to cut nearly 4,600 additional jobs.
Reuters reports that, similar to the steps taken so far, this is again a case of 'agreed job cuts,' which the manufacturer's new CEO, Michael Leiters, has reached with the works councils. Employees in unnecessary positions will be offered voluntary retirement packages, or the positions will be eliminated as they become vacant naturally, as a result of retirement or resignation, which occurs in any company. One might wonder, of course, why Porsche employs people in unnecessary positions in the first place, but apparently that was the case.
As of the end of 2024, Porsche had the largest workforce in its history, 42,600 employees, but at the end of the process — which will last until 2035 — it will employ closer to 33,000 worldwide.
The efficiency plan is required as a result of the collapse in sales in China, where the shift to 'smart' electric cars and a sharp rise in demand for local products have hit Western brands, led by German production, which Porsche leads as a manufacturer of luxury sports cars.
The manufacturer's electrification plan, which started with the Taycan and continued with the new Macan, has been a complete failure and has not managed to stop the decline in China. As a result, Porsche has already announced the continuation of gasoline Cayenne production alongside its new electric sibling, the return of the gasoline Macan towards the end of the decade, and the 718 project — a new electric generation for the Boxster and Cayman — is also in jeopardy. A new generation of the Taycan may be combined with the Panamera and offer electric and gasoline versions, likely with a plug-in hybrid powertrain.
According to Daniel Schwarz, an analyst at the investment bank Metzler who spoke with Reuters, the staff reduction corresponds roughly to the decline in sales. 'It is inevitable to reduce costs, because there is no expectation of a return to strong growth in China.'
Despite the intention to cut staff, Porsche will actually increase investment in its main production base in Germany, the Zuffenhausen plant in Stuttgart, along with the research and development center in Weissach. According to the manufacturer's works council, an agreement has been reached to upgrade these facilities at a cost of 2.1 billion euros. It is estimated that Porsche is also expected to return Cayenne production to the assembly line in Leipzig, after years of being produced in Bratislava, Slovakia, at a Volkswagen plant. This is intended to prevent layoffs at the German plant.
Recall that the announcement of staff cuts at Porsche does not happen in a vacuum in Germany: competitors such as Mercedes and BMW have also already announced cuts, following the protective tariffs imposed by Donald Trump on products imported from Europe and increasing competition from China. At Porsche's parent company, Volkswagen, CEO Oliver Blume is currently in talks with works councils, which could lead to the cutting of 100,000 employees and the closing of four plants — including one Audi plant — as a result of the collapse in sales in China, unsuccessful electrification policy, and the invasion of Chinese manufacturers into Europe. Blume also managed Porsche until the end of last year, until he was replaced at the top by Leiters.
