Porsche announced on Friday that it will close three subsidiaries—a developer of electric‑vehicle batteries, a software unit, and an e‑bike systems company—resulting in more than 500 job losses. The closures affect 360 employees at the e‑bike subsidiary, which operates in Germany and Croatia, with the remaining cuts spread across the battery and software businesses. Overall, the reduction represents roughly one percent of Porsche’s global workforce of about 42,000.
The move is part of a broader restructuring aimed at refocusing on the core sports‑car business after a sharp decline in profitability. “Porsche must refocus on its core business,” said Michael Leiters, who became chief executive earlier this year. “This forces us to make painful cuts – including our subsidiaries.” The decision follows 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 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 face 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.
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