Porsche Launches Layoffs and Production Cuts Amid Slumping Sales
Porsche has initiated cost-cutting measures amid persistently declining sales. New CEO Michael Lottner is pushing to reduce production plans, cut jobs, and streamline the executive leadership team.
The company sold approximately 280,000 new vehicles last year which is over 30,000 less sports vehicles than the previous year and reported a 15% year-over-year drop in first-quarter sales this year. The previous management had targeted annual sales of 350,000 to 400,000 vehicles, but the company’s operating profit margin last year was just slightly above 1%.
Meanwhile, Lottner plans to adjust annual production capacity to around 200,000 units to restore profitability and has set a target of achieving an operating profit margin of 10% to 15% by 2030.
Porsche is currently negotiating its cost-reduction plan with Germany’s works council. Layoffs are expected to focus on the Weissach R&D center, which employs about 5,200 people, with roughly one-quarter of those positions at risk of elimination.
Additionally, Matthias Becker, head of sales, may depart the company, as he is seen as linked to Porsche’s declining sales in China. To address overcapacity, Porsche also plans to merge its production and procurement divisions.
According to Porsche’s 2025 annual report, operating profit plunged 92.7% year-on-year to €413 million ($472 million). Return on sales collapsed from 14.1% in 2024 to 1.1% in 2025.
Cash flow also tightened sharply. Automotive business cash flow fell to €1.51 billion ($1.73 billion) at end-2025, down €2.22 billion ($2.54 billion) from a year earlier.
Global deliveries dropped 10.1% year-on-year to 279,449 vehicles in 2025. Battery-electric models accounted for 22.2% of total sales.
Did you know that China remains the company’s weakest major market.
