Porsche Slashes 500 Jobs, Shuts EV Divisions in Major Restructuring Amid Weak Demand

Porsche is undertaking a major restructuring effort in response to weakening demand, rising tariff costs, and the failure of its electric vehicle (EV) strategy. The company will eliminate more than 500 jobs and discontinue several electric-focused subsidiaries as it shifts its focus back to its core automotive business.

Job Cuts and Subsidiary Closures

As part of the restructuring, Porsche will shut down Cellforce Group, Porsche eBike Performance, and Cetitec. These closures will result in the loss of 500 jobs across Germany and Croatia.

• Cellforce Group, Porsche’s battery technology venture focused on high-performance lithium-ion cells for EVs and motorsport, will close with the loss of 50 jobs. The company cited a lack of a "sufficiently viable long-term perspective" for the subsidiary.
• Porsche eBike Performance, which handled electric bike drive systems, will shut down, resulting in the loss of 360 jobs. Porsche attributed this decision to "fundamentally changed market conditions for e-bike drive systems."
• Cetitec, an engineering and technical consulting firm for automotive development, will close, affecting 60 employees in Germany and 30 in Croatia.

Refocusing on Core Business

CEO Michael Leiters emphasized the need for Porsche to refocus on its core automotive business to ensure long-term success. "Porsche must refocus on its core business," Leiters stated. "This is the indispensable foundation for a successful strategic realignment [and] forces us to make painful cuts — including our subsidiaries."

Executive Restructuring and Software Shift

In addition to subsidiary closures, Porsche is restructuring its executive board. The standalone Car-IT division will be folded into the broader research and development department led by Michael Steiner. This move reverses a previous decision to create a dedicated software-focused board role, which was established to recruit Sajjad Khan from Mercedes-Benz.

Khan, who earned €1.4 million ($1.65 million) last year, was tasked with modernizing Porsche’s infotainment and digital experience. His influence is already visible in the redesigned cockpit and connected features of the electric Cayenne.

Product Strategy Challenges

Porsche’s product strategy is facing significant challenges. The company plans to discontinue the combustion Macan SUV this summer, despite strong demand for gas-powered models in key markets like the US. The electric Macan replacement is not expected to be ready until around 2028, leaving a gap in one of Porsche’s most important model lines.

Meanwhile, Porsche’s sales in China continue to decline as local EV brands offer cheaper alternatives with advanced technology. The company’s struggle to adapt to shifting market conditions underscores the difficulties it faces in balancing its electric ambitions with traditional combustion models.

Porsche’s Recent Moves

Last month, Porsche sold its stake in Bugatti and Rimac, signaling a broader shift in its strategic priorities. The company is now prioritizing its core automotive business and profitability amid a challenging market environment.