Porsche has recently announced to its employees that there will be further cuts as the company is forced to take such drastic steps due to low demand in China and the high U.S. tariffs. A Bloomberg report revealed that a memo was sent by Chief Executive Officer Oliver Blume explaining that the process will start in the second half of this year.
Porsche’s profit plunge: Situation looks grim
Porsche has revealed that the sales slump is due to low electric vehicle demand in China. The German sports car manufacturer is not able to compete in the world’s largest EV market due to the strong and aggressive competition. To make matters worse, Donald Trump’s tariffs have made the situation even more complicated. As Porsche directly imports its vehicles to the U.S. market, there is now a ‘slowdown’ here as well.
Blume in the memo stated, “Our business model, which has served us well for many decades, no longer works in its current form. All of this is hitting us hard — harder than many other car manufacturers.”
Porsche to cut 1,900 jobs by 2029
In February this year, Porsche had said that around 1,900 jobs would be cut across the company in the next four years. According to Reuters, the German carmaker aims to reduce the workforce by 15% by 2029 at its sites in its main sites in Germany — Stuttgart-Zuffenhausen and Weissach.
The spokesperson assured that the company is in a better place than its competition due to the ‘ramp-up of electric vehicles and geopolitical and economic conditions’. The company said that, unfortunately, this is not enough. This process had started in 2024 when the company did not renew 1,500 contractual employees. Another 500 employees are expected to be let go.
In February, Porsche pulled the trigger and let go of CFO Lutz Meschke and Sales Director Detlev von Platen, as they were held responsible for the company’s low sales numbers.
Porsche employs a workforce of 42,000 worldwide. The company was once one of the profitable brands in the Volkswagen Group, but last year, the company registered a 3% drop worldwide and a massive 28% dip in China.
