At Porsche in Stuttgart, CEO Michael Leiters has announced further staff reductions following the ongoing elimination of 3,900 jobs. The trigger is the sports car manufacturer’s massive profit slump last year, during which the company presented the first key elements of its Strategy 2035 at its annual press conference. The strategy focuses on a more stringent cost-cutting program, new high-margin products, and an organizational restructuring. The decisive risk factor remains the significantly reduced profitability, as Porsche barely made a profit in 2025. This increases the risk of further job losses for the workforce, while at the same time the company is intensifying pressure on costs, structures, and model policy. (automobilwoche: 11.03.26)
Profit slump forces Porsche to implement tougher cost-cutting measures
Michael Leiters has only been in office for about 70 days, but he is already making his mark. For him, the manufacturer’s competitiveness is paramount. Therefore, he intends to significantly tighten the existing structural package II.
Following the annual press conference, the Porsche CEO made it clear that this will not be without consequences for the workforce. The revised cost-cutting program will include further job reductions. This goes beyond previous cuts, as management believes the existing measures are insufficient.
New CEO Reorganizes the Company
The CEO is linking the staff reduction to a broader restructuring of the company, while Porsche simultaneously aims to accelerate its processes. Hierarchies are to be flattened and decisions made more quickly. Furthermore, the cost base is to be reduced so that the manufacturer can achieve higher returns.
The reason for this course of action lies in the company’s financial figures. Porsche was long considered particularly profitable, but the picture has changed dramatically. The sharp drop in profits therefore marks a significant turning point for a manufacturer that has operated with exceptionally high margins for years.
China, Electrification Strategy, and Costs Weigh on Porsche
Several problems hit the company almost simultaneously, and they exacerbated each other. The realignment toward electromobility is costing a lot of money, while sales in key markets are weaker. Added to this is the intensified competition in China, where local manufacturers are increasing the pressure on Western premium brands.
This is particularly critical for Porsche because its business model relies on high profits per vehicle. If sales, costs, and the model mix become unbalanced, the margin drops very quickly. Therefore, management is now reacting with cost-cutting measures and a clear shift in product strategy.
Luxury Models Are Supposed to Boost Profitability
With its Strategy 2035, Porsche is focusing more on exclusive vehicles, while the importance of sheer sales volume is declining. In the future, the company aims to earn more per car. Therefore, new luxury models and particularly high-margin variants are taking center stage.
For employees, however, a different message is crucial. The further job cuts demonstrate that Porsche does not view the profit slump as a temporary dip. The company is planning a longer restructuring process that will involve fewer staff, leaner structures, and more expensive models.