Luxury car maker announces massive layoffs

The German manufacturer of luxury cars and sports cars Porsche has presented a new anti-crisis strategy that will affect at least 40 percent of its management team. In addition, the cost of already expensive cars will increase, writes Reuters.

Saving money will be one of the priorities of the strategy. Porsche plans to cut labor costs in production by up to 30 percent, not including 10 percent under the current workforce reduction program. The number of management positions will be reduced by 40 percent, and development costs for future models will be reduced to 20. In particular, this implies greater use of common platforms with another Volkswagen brand, Audi. It is planned to reduce sales and distribution costs by 20 percent.

Among the obligatory points of the “recovery” plan is to achieve a net cash flow profitability in the automotive division of 9-12 percent. Porsche plans to reach the break-even threshold with a volume of 200 thousand cars. This means that previous sales volumes will be reduced. In 2025 they were equal to 279,449 units.

As part of the strategy, the company decided to strengthen expensive segments and at the same time reduce the number of model options by 20 percent. This is expected to boost sales of each model by 30 percent over the medium term. Porsche maintains a three-pronged approach to powertrains: investments in internal combustion engines, plug-in hybrids and battery technology. This officially ends the electric vehicle strategy that was put on hold under former CEO Oliver Blume. The strategic pivot cost the automaker and its parent company, Volkswagen, nearly 7 billion euros. CEO Michael Leiters has confirmed that there will not be an electric version of the 911.

Porsche plans to introduce a new compact SUV in 2027. In addition, he is considering the creation of a new luxury SUV, which will be higher in the lineup than the Cayenne. By 2030, the company aims to launch at least one “new brand-defining product” every year.

By expanding into the premium segment and increasing personalization capabilities, Porsche plans to raise the price of top models by about 20 percent. Sales of personalization services should increase sixfold.