Porsche Announces New Cost-Cutting Measures Amidst Market Challenges

Porsche's CEO has reached out to employees regarding the need for further cost-reduction initiatives as the company grapples with significant market challenges. In a recent communication to staff, the CEO emphasized the seriousness of the current situation and the necessity for the company to remain agile in the face of rapid industry changes.

In light of declining sales in China, rising tariffs in the United States, and a sluggish transition towards electric vehicles, the automotive manufacturer is under pressure to implement effective cost-saving strategies. The CEO indicated that discussions will commence in the latter half of 2025 aimed at developing a second structural package, which would ensure the long-term viability of the company.

While the specifics regarding potential layoffs were not disclosed, it was previously announced that Porsche plans to reduce its workforce in the Stuttgart region by 1,900 positions by 2029 through voluntary measures. Currently, job security terms are in place for employees until 2030, preventing any layoffs during this period.

The CEO highlighted several factors contributing to the company's precarious situation. The luxury goods market in China has experienced a significant downturn, which has severely impacted sales. Additionally, the recent increase in tariffs in the U.S. market and unfavorable currency fluctuations have further strained operations. The ongoing shift towards electric mobility has also required substantial investments to adapt production capabilities, leading to estimated additional costs approaching EUR1.3 billion this year.

These challenges are reflected in the company's financial performance. Following a downturn in 2024, Porsche's profits continued to decline in the first quarter of 2025, with operational earnings reported at EUR760 million--down 40.6% compared to the previous year. Revenue also fell to EUR8.86 billion, prompting a revision of the company's financial outlook for 2025.

Management is expected to release comprehensive financial results for the first half of the year by the end of July, with a particular focus on addressing the sharp decline in sales, especially within the Chinese market.