German sports car maker Porsche is undertaking a significant corporate overhaul, closing three subsidiaries and cutting more than 500 jobs in a bid to refocus its business after a sharp drop in sales and profits. The move marks a strategic retreat from recent diversification efforts into e-bikes and battery technology.
"We must refocus on our core business," Porsche CEO Michael Leiters said in a statement. "This is the indispensable foundation for a successful strategic realignment. This forces us to make painful cuts — including our subsidiaries."
The restructuring comes as the automaker grapples with collapsing demand in key markets, with first-quarter sales falling 21 percent in China, 11 percent in North America, and 18 percent in Europe. The company is shutting down its Cellforce Group battery venture, Porsche eBike Performance unit, and the Cetitec software subsidiary. In a related move, the executive board is being reduced from eight to seven members, with the Car-IT division being absorbed into the broader research and development department.
At stake is Porsche's ability to navigate a difficult transition to electric vehicles while maintaining its high profitability. The company faces a painful gap in its product line, with the popular combustion-engine Macan SUV set to be discontinued this summer, years before a new combustion or hybrid replacement is expected in 2028. This overhaul aims to make the company "leaner, faster and the products even more desirable" ahead of what is expected to be a challenging period.
The decision to shutter the Cellforce battery subsidiary is a stark reversal for Porsche. In 2022, then-CEO Oliver Blume, who now heads the entire Volkswagen Group, called the battery cell "the combustion chamber of the future," signaling deep ambitions in vertical integration. Now, the company says it will pursue a more flexible "technology-open powertrain strategy," relying more heavily on partners for batteries.
The management shuffle also shows a change in priorities. Sajjad Khan, recruited from Mercedes-Benz to lead the standalone Car-IT division, will depart the board. His division will now report to Michael Steiner, the long-serving head of R&D. This consolidation is part of a cost-cutting drive across the parent Volkswagen Group as it contends with high costs and a complex EV transition. The move follows Porsche's sale of its equity stakes in Bugatti Rimac and Rimac Group in April, further streamlining its focus on its core brand.
This article is for informational purposes only and does not constitute investment advice.
