Major Challenges at Porsche: Cutting 3.900 Jobs

German automaker Porsche is set to lay off nearly 4,000 employees due to declining sales. According to Automotive News Europe the company plans to reallocate resources to focus on combustion engine development.

A Major Cost-Cutting Initiative

Earlier this year, Porsche announced plans to cut 1,900 jobs. Now, an additional 3,900 layoffs have been added to the total.

Reasons Behind the Job Cuts

The layoffs come as a response to weak sales in China and the potential threat of U.S. tariffs on European cars.

Declining Sales in China

Porsche’s sales in China dropped by 28% compared to 2023, significantly impacting the company’s revenue expectations for the year.

Low Demand for Electric Models

The demand for Porsche’s electric models, such as the Taycan and the new Macan, has been lower than expected, leading to a shift in investment strategies.

€6 Billion Shift to Hybrid and Combustion Engines

Porsche will redirect around €6 billion into new plug-in hybrid models and internal combustion engine vehicles.

Porsche to Continue Combustion Engines Until 2030s

Despite industry trends towards electrification, Porsche plans to continue offering combustion engine models well into the 2030s.

Future Plans: New 911 and SUV

The company is considering launching a new generation of the iconic 911 model and a potential new SUV with a combustion engine towards the end of the decade.

Porsche Still Behind 2023 Record Sales

While Porsche recorded growth in four out of five regions in 2024, total sales remain behind the record year of 2023.

Declining Deliveries

In 2023, Porsche delivered 320,000 cars. In 2024, the number dropped to 310,000, contributing to the decision to cut jobs.

2,000 Jobs Lost Through Expiring Contracts

Of the 3,900 layoffs, 2,000 jobs will be cut by not renewing temporary contracts. The previously announced 1,900 job reductions will take place by 2029.

Volkswagen Group Also Cutting Jobs

Porsche is not the only part of the Volkswagen Group undergoing job cuts. The parent company plans to eliminate 35,000 positions by 2030 and close three factories in Germany.

Job Cuts at Audi and Skoda

Audi has laid off its entire workforce in Belgium and closed its factory there. Meanwhile, Skoda in the Czech Republic has announced plans to cut 8,000 jobs.

A Tough Time for the Auto Industry

It is a challenging time for the automotive industry, as companies must navigate the transition between fossil-fuel vehicles, hybrids, and electric cars. Major automakers, in particular, have struggled to perform as EVs continue to gain popularity.

Recently, we also reported on Maserati, which decided to scrap its electric car due to a complete lack of buyers.