On the Dash:
- Porsche has agreed to cut 3,900 jobs with unions as part of CEO Michael Leiters’ sweeping restructuring plan.
- The automaker’s operating margin collapsed to roughly 1% in 2025 as China sales fell 26%.
- Porsche will unveil its full strategy through 2035 at an investor event on October 7.
Porsche has agreed to cut 3,900 jobs with German unions as CEO Michael Leiters pushes through a sweeping restructuring plan aimed at restoring the luxury automaker’s long-term profitability.
Leiters, brought in at the start of the year to lead the overhaul of the Volkswagen subsidiary, asked shareholders for patience Tuesday and pledged to lay out detailed turnaround measures at a capital markets day on October 7. Many investors are pushing for faster action after a difficult 2025, when Porsche’s decline in China deepened and its operating margin collapsed to nearly 1%.
Restructuring efforts
Porsche has already begun streamlining its business by shedding non-core assets and operations. The automaker reached an agreement to sell its stake in Bugatti Rimac and Rimac Group. It also moved to shut down the battery technology developer Cellforce Group, the e-bike drive systems company Porsche eBike Performance, and the software developer Cetitec. Management is focusing resources on the company’s core automotive business while simplifying its organizational structure.
Shares of Porsche, long known for its 911 sports cars, have fallen by roughly half since the company’s 2022 listing. Over that period, China shifted from one of the automaker’s most profitable markets to its weakest, with sales dropping 26% in 2025 as homegrown competitors like Xiaomi introduced tech-heavy SUVs at lower price points.
The luxury automaker is also investing in new gasoline-powered and hybrid vehicles after delaying portions of its all-electric rollout. The company is pursuing a value-over-volume strategy that prioritizes profitability and higher-margin vehicle sales over total sales volume. As part of that approach, Porsche plans to reduce the number of model variants to concentrate on a smaller lineup with stronger customer demand, including the 911 and an upcoming all-electric Cayenne SUV.
What’s next
Porsche plans to unveil its full corporate strategy through 2035 at the October 7 investor event. The roadmap will address brand development, customer experience, product technology, and operational efficiency.
Despite the challenges, the luxury automaker reaffirmed its full-year financial outlook. The company expects 2026 revenue of €35 billion to €36 billion, an operating margin of 5.5% to 7.5%, and an automotive net cash flow margin of 3% to 5%.
Porsche expects restructuring-related expenses to total between €800 million and €900 million this year, along with roughly €700 million in tariff-related costs as it navigates a challenging global business environment.
