Porsche announced plans to cut over 500 jobs as part of a restructuring effort that includes closing three subsidiaries. The decision comes as the luxury carmaker faces significant profit declines due to dropping sales in China and the impact of US tariffs.
The closures involve a developer of electric vehicle (EV) batteries, a software subsidiary, and a company focused on electric bike systems. This move marks a strategic shift for Porsche, which is a subsidiary of Volkswagen.
Porsche must refocus on its core business. This forces us to make painful cuts -- including our subsidiaries.
Michael Leiters, CEO of Porsche
Of the 500 jobs affected, 360 are from the e-bike subsidiary located in Germany and Croatia. This represents about one percent of Porsche's total global workforce of approximately 42,000.
Porsche's shares rose 1.7 percent following the announcement. This follows a previous announcement in February 2022, where the company revealed plans to cut 1,900 jobs.
The luxury automaker has faced difficulties after investing heavily in its transition to electric vehicles, only to see demand fall short of expectations. Last year, Porsche slowed its EV rollout, impacting the profits of its parent company, Volkswagen.
This restructuring comes at a time when the German automotive industry, including Volkswagen, is grappling with intense competition in China, sluggish demand in Europe, and challenges in the shift to electric mobility.
Porsche has warned that 2026 may be another tough year, with anticipated lower sales and tighter profit margins.