The luxury electric vehicle transition is proving to be a brutal reality check, even for the most prestigious German automakers. Facing a massive sales slump in key global markets and rapidly shrinking profit margins, Porsche is reportedly preparing to take a massive axe to its workforce.
According to new reports from German media outlet Manager Magazin and Reuters, Porsche is preparing a second round of major restructuring that could eliminate another 5,000 jobs. The Bild newspaper further noted that CEO Michael Leiters plans to shed between 5,000 and 6,000 positions by 2035.
This massive reduction comes as the automaker’s financial foundation begins to crack. Long considered the golden goose of the Volkswagen Group, Porsche saw its profit margins crash from comfortable double-digit percentages to a staggering 1.1% last year.
The China Problem and the EV Collapse
The massive job cuts are not happening in a vacuum; they are a direct response to a perfect storm of bad news in the electric vehicle sector, specifically in China.
For years, the Chinese market was a guaranteed cash cow for European luxury brands. Today, it is arguably the most hostile automotive environment on the planet. Domestic Chinese EV makers like BYD, Zeekr, and Nio are completely outmaneuvering Porsche on price, connectivity, and digital integration. The financial bleeding is obvious: in the first quarter of 2026, Porsche deliveries in China plummeted by 21% to just 7,519 vehicles.
BYD EV car showroom in Shanghai, China | Robert Way via iStock
The situation is so dire that Porsche has reportedly halted new customized orders for the Taycan and electric Macan in mainland China, only allowing customers to buy existing stock.
Globally, the Taycan—once hailed as the ultimate electric sports sedan—is becoming a liability. Demand for premium EVs has cooled significantly, forcing Porsche to slow down production at its historic Zuffenhausen factory. In the used market, the Taycan is suffering catastrophic depreciation, with some models losing up to 50% of their value in just two years. The combination of software glitches, a previous battery recall, and limited range has severely dented buyer confidence.
Pivoting Away From a Flawed Strategy
Porsche CEO Michael Leiters has openly admitted that the company miscalculated its future. In a recent interview, Leiters stated that Porsche had placed too much emphasis on electric vehicles and incorrectly assumed that sales would experience sustained growth.
The pain isn’t just isolated to Stuttgart. Porsche’s parent company, Volkswagen Group, has warned that a staggering 100,000 jobs could be cut across the entire conglomerate as it battles to remain cost-competitive against an influx of cheap, high-tech Chinese EVs.
While the 911 remains a bright spot—with deliveries up 22% early this year—the internal-combustion icon cannot carry the entire weight of the brand’s bloated EV infrastructure. Until Porsche can figure out how to sell electric cars profitably in a hyper-competitive market, the downsizing will likely continue.