Porsche CEO Michael Leiters confirmed that the company plans to reach an agreement with employee representatives on a second round of cost-cutting measures before the factory’s summer production break in July. The plan includes both capacity reduction and workforce optimization, with the annual vehicle production target set at below 280,000 units in 2025. This decision directly responds to operational pressures arising from changes in U.S. tariff policies and intensified competition in the European market, marking Porsche’s strategic shift from scale expansion to profit prioritization.
Financial data shows that Porsche’s 2024 sales revenue was approximately 40 billion euros, down 1.1% year-on-year, while net profit fell to 3.6 billion euros, a year-on-year decline of 30.3%. Based on this performance, the company has lowered its medium-term profit margin target from the 17% to 19% range to 15% to 17%. To restore profitability, Porsche has formulated a plan to cut approximately 3,900 jobs by 2029, with around 1,900 positions to be reduced at its plants in Zuffenhausen and Weissach, Germany, through natural attrition, hiring restrictions, and voluntary severance agreements. This streamlining of the workforce is akin to a surgical slimming of the corporate body, aimed at reducing the proportion of fixed costs to adapt to the new market environment.
On the product and supply chain front, Porsche has chosen to deepen collaboration with Audi to enhance R&D and procurement efficiency. Although the current 718 series, consisting of the gasoline-powered Boxster and Cayman, was discontinued last year, the entry-level 718 product line will be retained to maintain the ability to attract new customers. In response to three consecutive years of declining sales in the Chinese market, with a 28% drop in 2024, Porsche China CEO Pan Lichi announced a dynamic adjustment of the dealer network from 160 outlets at the beginning of 2024 to 100 by 2026, while increasing localized R&D and procurement efforts. These measures indicate that Porsche is restructuring its cost system by reducing production and sales scale, optimizing channel structure, and strengthening group synergies to address the impact of changes in the global automotive market landscape on the premium pricing power of luxury brands.
