As China’s economy continues to decline and consumer spending drops, sales of luxury cars have significantly decreased. On December 17th, topics such as “Porsche China Layoffs” and “Severance Package N+6” surged on the hot search list on Weibo.
Several mainland media outlets reported on December 17th that the German luxury car brand Porsche has initiated layoffs in the Chinese market, including positions for regular employees and outsourced workers, with severance packages executed according to the N+6 standard.
An internal employee of Porsche confirmed to reporters from “Yicai” that the layoffs are indeed happening, with the company planning to lay off 10% of regular employees and 30% of outsourced workers.
However, a Porsche China spokesperson responded by saying, “The information circulating online about Porsche planning layoffs in the Chinese market is untrue. Facing a complex market environment, we are optimizing our internal organizational structure to ensure sustainable growth amidst rapid industry transformation. In this context, Porsche China is continuing to enhance the efficiency and streamline costs of various departments and projects. Depending on the actual situation, the related measures will also involve both indirect and direct labor costs.”
A Porsche China employee told reporters from “Securities Daily” that while the company is indeed optimizing its operations, the actual percentage of regular employee layoffs shouldn’t be as high as 10%, and the layoffs are being communicated directly with the individuals involved without any official notices, making it difficult to know the exact percentage of job cuts.
The news of layoffs is related to the significant decline in Porsche’s performance. Sales data released by Porsche shows that global sales dropped by 7% to 226,026 vehicles in the first three quarters of this year, with the North American market falling by 9% and the Chinese market plummeting by 28.75%. Specifically, the Panamera and Taycan models saw the biggest decline in sales, at 20% and 50% respectively.
Last week, Porsche China’s CEO and President Alexander Pollich stated, “We will not sacrifice product prices for increased sales volume; simply pursuing volume growth is not Porsche’s goal.”
Pollich also announced that Porsche plans to optimize its dealer network to around 100 by the end of 2026, reducing it by one-third. As of December 2023, Porsche China had approximately 154 dealerships.
Porsche entered the Chinese market in 2001, with China becoming its largest single market globally in 2015, a position it maintained for the following 7 years. However, in 2023, Porsche’s market in China underwent a change. While global sales increased by 3% to 320,000 vehicles, sales in the Chinese market dropped by 15% to 79,000 vehicles.