Porsche is preparing to further reduce its headcount as costs mount and profits drop, and CEO Oliver Blume has warned employees that change is on the horizon.
In an internal memo to Porsche staff reportedly seen by Bloomberg, Blume said it will begin to negotiate employment reductions in the second half of the year, detailing its existing business model isn’t sustainable.
“Our business model, which has served us well for many decades, no longer works in its current form,” Blume reportedly said in the memo.
“All of this is hitting us hard – harder than many other car manufacturers,” the executive said, speaking about weak demand for EVs, as well as its sliding sales in China.
In addition to these factors, Porsche is arguably most affected by tariffs in the US, which is currently its biggest market. A majority of carmakers are facing import tariffs of 25 per cent for vehicles shipped to the US.
According to Bloomberg, Porsche’s operating margin was 8.6 per cent in the first quarter of 2025, however the upcoming changes to its employment structure are aimed at increasing this to about 15 to 17 per cent in the medium term.
A majority of the changes are believed to be planned for Porsche’s German operations, where both labour and energy are more expensive than in most other European nations.
Porsche has previously announced it’ll cut 3900 jobs by 2029, however most of these will come from the firm allowing existing contracts to expire, as well as natural attrition.
The Volkswagen Group, Porsche’s parent company, announced in December last year that it would effectively cull 35,000 jobs by 2030, due to related cost concerns.
In addition to Porsche currently suffering lower than expected demand for its EVs, the carmaker delayed its upcoming battery-powered Cayman and Boxster twins earlier this year, with the new 718 now reportedly not due until 2027.
This means Porsche’s goal of reaching 80 per cent EV sales by 2030 – a target most recently reiterated in March 2024 – is unlikely to be met, despite the Macan recently going all-electric, and a new EV Cayenne on the horizon.
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