Porsche will close three subsidiaries – an electric‑vehicle battery developer, a software unit and an e‑bike systems company – resulting in more than 500 job losses, the automaker announced on Friday. The move is part of a broader restructuring aimed at refocusing on the core sports‑car business after a sharp decline in profitability.
The closures will affect 360 employees at the e‑bike subsidiary, which operates in Germany and Croatia, with the remaining positions cut across the battery and software businesses. The total workforce reduction represents roughly one percent of Porsche’s global staff of about 42,000.
“Porsche must refocus on its core business,” said Michael Leiters, who assumed the chief‑executive role earlier this year. “This forces us to make painful cuts – including our subsidiaries.” The decision follows a period of mounting pressure on the German luxury brand, driven by falling sales in China, U.S. tariff impacts and a costly slowdown in its electric‑vehicle (EV) transition.
Porsche’s earnings collapsed in 2023 as demand for its flagship 911 and other models weakened. The company had already announced a program of 1,900 job cuts in February 2023. The latest restructuring comes as the broader Volkswagen Group – of which Porsche is a subsidiary – grapples with the financial strain of its EV strategy, which has dented group profits by billions of euros.
Industry analysts note that many European automakers are confronting similar challenges: intense competition in the Chinese market, sluggish demand in Europe, and the complexities of shifting from internal‑combustion engines to electric powertrains. Volkswagen, the continent’s largest carmaker, has delayed the launch of several fully electric models and extended the life cycles of existing combustion‑engine and hybrid vehicles in response to weaker-than‑expected demand.
Porsche’s share price rose 1.7 percent on the Frankfurt exchange after the announcement, reflecting investor relief at the decisive cost‑cutting measures. Nevertheless, the company warned that 2024 will remain difficult, with lower sales volumes and tighter margins expected to persist.
The closures underscore the ongoing volatility in the automotive sector as manufacturers recalibrate strategies amid a rapidly evolving market. Porsche’s next steps will involve concentrating resources on its high‑performance core while monitoring the broader Group’s progress in stabilising its electric‑vehicle initiatives.
