Porsche to cut 1,900 jobs
- Adam Edwards
- Feb 13
- 2 min read
The car market is fascinating due to shifting consumer demand, technological advancements, and economic pressures. EV adoption is slowing, prompting brands like Porsche to reinvest in hybrids and combustion engines. Meanwhile, geopolitical tensions, supply chain disruptions, and cost-cutting measures are reshaping industry strategies, making profitability and innovation key battlegrounds.
I read this morning that Porsche is planning to cut 1,900 jobs in Germany, here are 10 key takeaways from that article
Job Cuts Due to Weak EV Demand – Porsche will cut 1,900 jobs in Germany by 2029, mainly at its Zuffenhausen factory and R&D centre, due to lower-than-expected demand for its electric Taycan model.
Struggling Profit Margins – Porsche has warned that its profit margins for 2024 will be between 10-12%, significantly below its long-term target of 20%, reflecting financial strain.
EV Sales Declining in China – Taycan sales dropped 28% in China last year, a crucial market for luxury EVs, contributing to a 49% global drop in demand for the model.
Shift Towards Combustion & Hybrid Vehicles – Porsche is investing €800 million in expanding its range of combustion engine and hybrid cars, stepping back from a full EV transition.
Wider Cost-Cutting in VW Group – The cuts are part of broader restructuring within Volkswagen, which agreed to cut 35,000 jobs by 2030, impacting brands like Audi.
Voluntary Redundancies & Pre-Retirement – Instead of forced layoffs, Porsche will reduce its workforce through voluntary redundancy packages and pre-retirement offers, with some available for employees as young as 55.
Temporary Workers Leaving – By the end of 2024, 2,000 temporary workers will have left Porsche as their contracts are not renewed, further trimming costs.
Geopolitical & Economic Challenges – Porsche cited “challenging geopolitical and economic conditions” as reasons for delayed EV adoption and its need to cut costs.
Leadership Reshuffle Underway – Porsche is in talks to replace its CFO, Lutz Meschke, and head of sales, Detlev von Platen, amid concerns over financial performance.
Long-Term Strategy Adjustment – Porsche’s restructuring suggests a shift in its cash allocation priorities, focusing on hybrids and combustion cars instead of full electrification, reflecting market trends and financial pressures.
Implications for Cash Management & Allocation
Porsche’s decision to cut jobs while investing heavily in combustion and hybrid technology indicates a shift in cash allocation priorities. Instead of doubling down on EVs, the company is reallocating capital to segments with stronger demand. The voluntary redundancy approach helps avoid costly severance payments, easing short-term cash outflows. However, the €800 million investment in non-EV development increases financial pressure, especially with lower profitability. Porsche’s declining margins suggest tighter cash management will be needed to balance investment with cost reductions. The company’s restructuring of senior leadership also signals an effort to improve financial performance and regain investor confidence.