Porsche to Finalize New Cost-Cutting Measures by July Amid Sales Slowdown
The German sports car manufacturer is responding to a sharp drop in profitability and weaker global demand with a new efficiency drive aimed at improving margins.
Porsche AG is set to finalize a new cost-cutting package with employees before its factory holidays in July, as the company navigates a challenging market environment marked by falling sales and profits. CEO Michael Leiters, who took the helm at the start of 2026, is steering the automaker toward a strategy of producing fewer vehicles to focus on higher profitability.
"Porsche has to make money with fewer cars," Leiters stated in a recent interview, signaling a strategic shift from volume to value. The move comes in response to a difficult 2025 financial year and a continued sales decline in the first quarter of 2026.
Challenging Financial Headwinds
The company's financial performance in 2025 saw a dramatic downturn. Group sales revenue fell to €36.27 billion from €40.08 billion in 2024. Operating profit plummeted to €413 million for the year, a steep decline from €5.64 billion in 2024, with the operating return on sales shrinking to just 1.1%. The company attributed the drop to extraordinary expenses related to product strategy realignment, battery activities, and U.S. tariffs.
The trend has continued into this year. In the first quarter of 2026, Porsche's global vehicle deliveries fell by 15% to 60,991 units compared to the same period in 2025. The slowdown was particularly acute in key markets, with a 21% decline in China and an 11% drop in the United States. Factors contributing to the slump include increased competition from local brands in China, the end of certain EV tax incentives in the U.S., and gaps in the product lineup as some combustion-engine models are phased out.
Details of the Efficiency Program
The upcoming efficiency measures are part of a broader plan to make the company more resilient. Porsche plans to lower its annual production capacity to below the approximately 280,000 cars sold in 2025. This plan includes further job reductions. After cutting around 2,000 temporary positions in 2025, the company intends to eliminate an additional 1,900 jobs over the coming years.
The strategy also involves deepening its collaboration with sister company Audi, part of the wider Volkswagen Group, to enhance synergies and optimize resources. Despite the cuts, Porsche has confirmed it will continue its entry-level 718 model series.
These efforts are an acceleration of the company's long-term "Road to 20" program, which aims to achieve a group operating return on sales of more than 20%. For the full 2026 fiscal year, Porsche has forecast an improved operating return on sales in the range of 5.5% to 7.5%.
Sources
- Porsche to Finalize Second Round of Cost-Cutting Measures in July
- Porsche CEO aims to finalise new cost-cutting package by July, FAS reports
- Porsche Sales Fall Again in 2026 as EV Subsidy Cuts Hit Demand
- Porsche is realigning itself: "Leaner, faster and even more desirable"
- Annual Press Conference 2026 – Porsche Newsroom AUS
- Porsche Deliveries Drop 15% in Q1 2026 Amid Weak China, US Markets
- Dr. Michael Leiters will become CEO of Porsche AG on 1 January 2026
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