Porsche to cut about 9,000 jobs as China sales slump
Porsche said Wednesday it will cut about 9,000 jobs by 2030, roughly a quarter of its workforce, as its sales in China slide. The Volkswagen-owned sports car maker will sell fewer cars at higher prices. Its profit margin fell to 1.1% last year, down from 18% two years earlier.
Porsche plans to cut about 9,000 jobs by 2030, roughly 25% of its workforce. The German sports car maker laid out the plan Wednesday at an investor day at its Weissach research center near Stuttgart, Quartz reported. Some of the cuts were announced earlier, and total reductions could reach 30%.
The trouble starts in China. Porsche's sales there fell by nearly a third in the first half of the year, Quartz reported, citing The New York Times. China once made up more than a third of Porsche's sales. By 2030, the company expects it to be about one in 10.
"Market dynamics have changed significantly," Chief Executive Michael Leiters said. "We do not believe it would be realistic or beneficial for the brand to pursue a return to those levels at any cost."
The new plan bets on fewer, pricier cars. Porsche wants to raise the average price of its top models by about 20%. It will offer about 20% fewer versions of its models. It also wants six times more revenue from its custom-car service, AM-online reported.
Cost cuts reach the top. Management jobs are to fall by 40%. Porsche said a deal with worker representatives includes the 9,000 job cuts but protects core staff jobs until 2035. It will also merge two units into one called Porsche Technologies.
Porsche's profit margin fell to 1.1% last year from 18% two years earlier. The company wants it back to 10% to 15% in the medium term. It also aims to break even on fewer than 200,000 cars a year.
New models are coming. An all-electric 718 Boxster and Cayman are due in 2028. So is a new SUV with a gas engine. Porsche is also working on a supercar that sits above the 911.
The pain spreads to its parent. Volkswagen owns 75% of Porsche and is already cutting 100,000 jobs across its group by 2030. Porsche's slide played a part in a €6 billion write-down Volkswagen disclosed last month. U.S. tariffs cost Porsche about €700 million last year, Quartz reported.
What we know: Porsche will cut about 9,000 jobs and push higher prices.
What we don't: How many of the cuts are new beyond earlier announced reductions.
Where outlets agree Quartz and AM-online both report Porsche plans about 9,000 job cuts, a 40% cut in management roles and about 20% higher prices for its top models.
Where they differ Porsche says some of the cuts were announced earlier, so it is not clear how many of the 9,000 are new job losses.