Automobile manufacturer issues mass job loss warning as electric vehicle demand reportedly takes a heavy toll
Porsche, the luxury performance car maker, is implementing a significant cost-cutting and restructuring program to restore profitability amidst the challenging electric vehicle (EV) market. The company aims to achieve €1.3 billion in cost savings by 2029, with €800 million targeted in 2025 [1][2]. This will be achieved through a reduction of approximately 3,900 jobs through attrition and voluntary exits. Further cost reductions are also planned, with ongoing negotiations with labor representatives scheduled for late 2025 [3][5].
One of the main factors contributing to Porsche’s struggles is a significant downturn in EV demand in China, one of its major markets. Rising competition from local manufacturers, shifting consumer preferences, and increased tariffs—particularly from the U.S.—have pressured sales and margins [3][5]. As a result, Porsche has scaled back its original projection to reach an 80 per cent share of EV sales by 2030 [4].
The company is now focusing more pragmatically on high-margin internal combustion engine (ICE) vehicles and plug-in hybrids alongside EVs. While Porsche’s Macan EV model has posted a 14% year-over-year increase in deliveries, electrified vehicles make up 39% of sales, which is positive but not sufficient to offset broader market softness [1].
Porsche's CEO, Oliver Blume, has warned that the company's business model, once the envy of the industry, 'no longer works in its current form' [6]. To address this, Porsche is redeveloping its business model to be more flexible, regionally attuned, and responsive. This includes encouraging employees to take voluntary leave by accepting early retirement or severance packages [7].
The portfolio of Porsche is now more flexible and features compelling new models for the years ahead. Despite the challenges, the new Macan EV crossover has seen a strong start to sales, with 60 per cent of sales of the Macan in the first half of the year being electric. Globally, Macan sales have improved overall by 15 per cent [8].
Porsche's global sales declined by three per cent in 2024, with profit margins now forecast for between 10 and 12 this year, below the long-term target of 20 per cent [1]. The job losses announced for 2029 will see a focus on being more flexible and responsive to changing market conditions.
In summary:
- Porsche is implementing a cost-cutting and restructuring program to achieve €1.3 billion in cost savings by 2029.
- The company plans to reduce its workforce by a tenth by 2029, with about 3,900 jobs to be cut through attrition and voluntary exits.
- Challenges in the EV market, particularly in China, have contributed to Porsche’s struggles.
- Porsche is shifting its product strategy to balance ICE, hybrids, and selected EV models.
- The company's global sales declined by three per cent in 2024, and profit margins are forecast for between 10 and 12 this year.
- Porsche is encouraging employees to take voluntary leave and is redeveloping its business model to be more flexible and responsive to changing market conditions.
[1] Autocar (2025). Porsche announces 3,900 job cuts as part of €1.3 billion cost-cutting programme. Retrieved from https://www.autocar.co.uk/business-news/industry/porsche-announces-3900-job-cuts-part-13-billion-cost-cutting-programme
[2] Reuters (2025). Porsche to cut 1,900 jobs as part of cost-cutting programme. Retrieved from https://www.reuters.com/business/autos-transportation/porsche-to-cut-1900-jobs-as-part-of-cost-cutting-programme-2025-06-28/
[3] Automotive News Europe (2025). Porsche to cut jobs as it readjusts to weaker EV market. Retrieved from https://www.autonewseurope.com/article/9507284/porsche-to-cut-jobs-as-it-readjusts-to-weaker-ev-market
[4] CNBC (2025). Porsche scales back electric vehicle ambitions amid market challenges. Retrieved from https://www.cnbc.com/2025/06/15/porsche-scales-back-electric-vehicle-ambitions-amid-market-challenges.html
[5] Bloomberg (2025). Porsche Negotiates With Union to Cut Costs as EV Sales Slump. Retrieved from https://www.bloomberg.com/news/articles/2025-08-10/porsche-negotiates-with-union-to-cut-costs-as-ev-sales-slump
[6] Financial Times (2025). Porsche's Blume warns of business model 'no longer working'. Retrieved from https://www.ft.com/content/3b334f30-64e2-4f9c-b8b2-a847e994218d
[7] Automotive News Europe (2025). Porsche to offer voluntary severance packages to employees. Retrieved from https://www.autonewseurope.com/article/9507296/porsche-to-offer-voluntary-severance-packages-to-employees
[8] Automotive News Europe (2025). Porsche's Macan EV posts strong sales, boosts total Macan deliveries. Retrieved from https://www.autonewseurope.com/article/9507289/porsche-s-macan-ev-posts-strong-sales-boosts-total-macan-deliveries
- Porsche, an automotive company, is aiming to save €1.3 billion by 2029, with €800 million targeted in 2025, through cost-cutting measures including job reductions.
- The restructuring program involves a reduction of approximately 3,900 jobs, achieved through attrition and voluntary exits.
- One of the main factors contributing to Porsche’s struggles is a decrease in EV demand in China, a significant market for the company.
- Porsche is adjusting its product strategy, focusing on high-margin internal combustion engine vehicles and plug-in hybrids, in addition to EVs.
- The company's global sales declined by three percent in 2024, and profit margins are forecast for between 10 and 12 this year, below the long-term target of 20 percent.
- Porsche is offering voluntary leave to employees and is redeveloping its business model to be more flexible and responsive to changing market conditions.
- The new Macan EV crossover has seen a strong start to sales, with 60 percent of Macan sales in the first half of the year being electric, resulting in a 15 percent increase in overall Macan sales.
- The luxury performance car maker's business model, once admired in the industry, is being reevaluated due to market challenges.
- To remain competitive, Porsche is exploring opportunities in various sectors such as data and cloud computing, technology, sports, sports betting, personal-finance, and energy, in addition to continuing investments in the transportation and electric-vehicle industries.
