Porsche CEO Michael Leiters wants to cut another 5,000 jobs. He presented the aggressive reduction proposal to the supervisory board this week as the automaker attempts to stop a severe cash bleed. Operating margins at the luxury brand just dropped from traditional double digits to a miserable 1.1 percent.
The internal math is ugly. Porsche watched its profits fall 91.4 percent last year, landing at just €310 million. Chinese buyers have largely stopped buying European luxury cars, and new United States tariffs are eating into whatever revenue is left. Add in a deeply flawed electric vehicle rollout, and the company is being forced to implement strict austerity measures. According to a report on the 91.4 percent profit collapse, management is capping annual special payments at €1,500 and slashing Christmas bonuses to offset the losses.
These new cuts push the total reduction to roughly 9,000 positions. Former CEO Oliver Blume previously authorized 3,900 layoffs before Leiters took over. In a bid to keep the remaining factory workers from striking, Porsche is offering an operational job security guarantee through 2035 in exchange for the deep headcount reductions.
The showroom floor is about to look remarkably empty. Dealerships are facing a massive product gap because the company killed off its high-volume vehicles before their electric successors were ready to ship. To understand how bare the lots will be, look at the production schedule:
- October 2025: Production of the 718 sports car line is officially halted.
- July 2026: Gas-powered Macan assembly ceases completely.
- 2027 to 2028: The earliest projected arrival window for their electric replacements.
This is not just a Porsche problem. The entire Volkswagen Group is shrinking rapidly. Former Porsche chief and current VW Group CEO Oliver Blume warned recently that up to 100,000 jobs could disappear across the wider corporation. To absorb the tariff costs and falling demand, four German manufacturing plants utilized by VW and Audi are actively threatened with closure over the next decade.
The Electric Transition Breaks the German Auto Model
The delay in Porsche’s EV lineup exposes a massive sequencing error in German manufacturing. Automakers killed off reliable, high-margin combustion engines before their battery-powered replacements were ready for consumers. Dealerships are now stuck in a two-year holding pattern with no entry-level product to sell.
When a premium brand like Porsche hits a 1.1 percent margin, it removes the financial safety net that traditionally subsidizes the mass-market Volkswagen and Audi brands. If Chinese buyers do not return to European luxury cars, the current factory footprint in Germany is mathematically unsustainable. The industry is currently watching to see if other European luxury brands will follow Porsche’s lead and aggressively shrink their domestic workforces before 2027.