Luxury car maker Porsche is to cut thousands of jobs as part of a plan to become more efficient as it issued a profit warning saying it feared the impact of US tariffs coming on top of competition from Chinese rivals and slow sales of electric vehicles (EV).
In a statement, the company, which has around 42,600 employees, said around 1,900 jobs will go by 2029, mainly through retirement and voluntary agreements. A further 2,000 jobs will go as short-term contracts ended.
The job losses come after the car firm said sales fell 3.7 per cent, with 310,718 cars sold during 2024 – down 3 per cent on the previous year.
It was badly hit by a 28 per cent fall in sales in China where like other manufacturers it faces stiffer competition from Chinese car firms like BYD and Geely. China’s challenging economic situation has also seen prices of all cars fall as companies chase customers.
Porsche’s full-year operating profit slumped 23 per cent year on year to €5.64bn (£4.73bn), as sales revenue fell 1.1 per cent to €40.08bn.
EVs accounted for 27 per cent of its sales, with full EVs making up 12.7 per cent. Porsche has said it believes the share of EVs will rise to more than one in five (22 per cent) in 2025.
The car group, which is majority owned by Volkswagen, had previously aimed for 80 per cent of its sales to be full electric by 2030 but is now openly “hedging” its bets.
It said it will spend more to improve its petrol engines as well as plug-in hybrids and battery electric vehicles to give its customers the widest choice of cars to drive well into the 2030s.
“In view of the significantly longer global transition phase towards electric mobility, Porsche is expanding its product portfolio in the coming years to include additional models with combustion engines and plug-in hybrid power trains,” it said.
The news resulted in Porsche’s shares suffering their worst day ever last month since it first listed in 2022, after explaining to shareholders that its profit margins would be dented further because the pivot back to petrol engine and hybrid models would cost €800m (£670m).
To complicate matters, it does not help that Porsche’s fully electric vehicle, the Taycan, has been hit by reliability problems and faced recalls. Customers have reported short-circuit problems on the car battery leading to fires in some instances. Its sales fell 50 per cent last year.
Adding to its problems is the prospect of a tariff trade war. Porsche finance chief Jochen Breckner said he was having “sleepless nights” worrying about the tariff impact.
It said it is still assessing how it could pass on to consumers the cost of possible tariffs, without damaging profits. “For now, we are hoping there are solutions that will lead to a sensible tariff regime between regions,” Breckner said.
Porsche is not the only luxury sports car maker experiencing problems. Stellantis-owned Maserati has said it is cancelling plans for its latest electric version of its MC20 sports car because of expected poor demand.
The MC20 Folgore had been due to debut this year. The decision was taken because of the lack of commercial prospects, with few vehicles expected to be sold in the coming years, according to a spokesperson.
