German sports car manufacturer Porsche has announced plans to cut 9,000 jobs and shift focus to high-margin luxury models as part of a major restructuring to counter declining global sales.
The Stuttgart-based carmaker presented its new Sportwagenschmiede 35 business strategy to investors on Wednesday, aiming to boost profit margins by prioritising top-end vehicles while lowering its annual break-even threshold.
Under the plan, Porsche will execute a socially responsible reduction of 9,000 jobs by 2035 to streamline operations to a core workforce. The company is seeking to lower its future break-even point to fewer than 200,000 units per year, down from total global deliveries of 279,449 cars last year.
The restructuring follows a slump in global deliveries of almost 10 per cent since Porsche's initial public offering in 2022. The downturn has been driven by plunging consumer demand in China and tariff complications in the United States, two of the company's largest markets.
Restructuring and Financial Margins
To cut ongoing operational expenses, Porsche completed the sale of its entire stake in Bugatti Rimac and Rimac Group to an international investor consortium last month. The brand also plans to shutter several other subsidiary businesses.
Chief Executive Officer Michael Leiters told investors that focusing on high-end sports cars such as the flagship 911 alongside luxury sport utility vehicles will put the manufacturer back on track.
Porsche's profit margin collapsed to 1.1 per cent last year, falling far short of the double-digit, Ferrari-style margins targeted when the company went public four years ago under former Chief Executive Oliver Blume.
Blume remains Chief Executive Officer of parent company Volkswagen, where he is negotiating with trade unions over a group-wide overhaul. The Volkswagen restructuring involves up to 100,000 job cuts worldwide and the potential closure of up to four manufacturing plants in Germany before 2030.
Volkswagen Group, Europe's largest automotive manufacturer, acquired full ownership of Porsche in 2012 following a complex multi-year takeover battle. Porsche AG remains headquartered in Stuttgart, where it manufactures sports cars alongside facilities in Leipzig.
Leiters is pursuing a "value over volume" strategy, shifting focus back toward internal combustion engine vehicles following costly electric vehicle development decisions under his predecessor. The chief executive also aims to lower development expenditure by expanding component and platform sharing with sister brand Audi.
Vehicle Lineup and Electric Model Delays
Despite the workforce reductions, Leiters confirmed that Porsche remains committed to launching all-electric versions of its 718 Boxster and Cayman models. Both vehicles have experienced delays as management re-evaluates the pace of its electrification strategy.
The electric 718 Boxster and Cayman are scheduled to debut next year, missing their original target launch date of 2025.
In 2028, Porsche plans to introduce a new mid-size SUV featuring internal combustion and plug-in hybrid powertrains, which will sell alongside the current all-electric Macan. Porsche stated that the new vehicle is "expected to make a noticeable contribution to sales and profitability in 2029."
The carmaker will also launch new vehicles in executive segments currently served by the gas-powered Panamera and electric Taycan, which the company noted are "expected to further improve earnings."
Future of the Taycan and Executive Strategy
German business publication WirtschaftsWoche reported that Porsche may discontinue the electric Taycan saloon by 2030. According to insider sources cited by the publication, management opted against transferring production from Stuttgart to its higher-capacity Leipzig plant and chose instead to phase out the model, which starts at £88,400 in the UK.
Addressing the company's long-term operational goals, Leiters said: "The ultimate goal is to further strengthen our unique sports car brand - across all model lines and with new, highly desirable models in particularly high-margin segments."
He added: "At the moment, the main focus is on reducing costs and making the company more financially robust."
