Porsche AG's Radical Surgery: Job Cuts and Portfolio Slimming Mask a Bruising Quarter

Porsche's Q1 operating profit dropped 22% to €595M amid China sales slump and EV slowdown, as CEO Leiters slashes costs and cuts 3,900 jobs by 2030.

Porsche AG is making painful choices now to avoid a bigger crisis later. The luxury carmaker posted a first-quarter operating profit of €595 million — a 22 percent slide from last year — but the real story lies in the aggressive restructuring underway in Stuttgart. CEO Michael Leiters, who took the helm in January 2026, is wielding the knife deep into the company’s operations.

The numbers for the first quarter of fiscal 2026 tell a sobering tale. Revenue fell 5.2 percent to €8.40 billion, while the operating margin contracted from 8.6 to 7.1 percent. Yet the company insists that margin landed at the upper end of its internal forecast, a claim that caught some analysts off guard. Jefferies analyst Philippe Houchois praised the model mix and pricing discipline, maintaining a “Hold” rating with a €41 price target.

China’s Tailspin and the 911 Bright Spot

The bleeding is most visible in China, where deliveries collapsed by 21 percent to roughly 7,500 vehicles. Porsche has deliberately stepped back from the brutal price war gripping the world’s largest auto market, a strategy that protects margins but punishes volume. Globally, the company handed over just under 61,000 cars to customers, a 14.7 percent decline year-on-year.

The shift away from battery-electric vehicles is equally stark. The BEV share of total sales dropped from 25.9 percent to 19.8 percent, signaling that even Porsche’s affluent clientele is cooling on EVs. Against this gloomy backdrop, the iconic 911 bucked the trend with a 22 percent surge in deliveries — proof that the combustion engine still has plenty of life in Zuffenhausen.

Cashflow Surprises as Costs Are Slashed

While the income statement looks bruised, the cash flow statement offers a glimmer of hope. Automotive net cash flow surged to €514 million from just €198 million a year earlier, driven by disciplined working capital management and lower capital expenditure. That cash cushion is badly needed as the company embarks on its most radical overhaul in years.

Leiters is moving fast. By 2030, Porsche expects to eliminate roughly 3,900 positions, with negotiations already underway. CFO Holger Breckner is also exploring the sale of a stake in the IT subsidiary MHP, part of a broader push to shed non-core assets and funnel resources into the main business. On April 24, Porsche sealed the sale of its stakes in Bugatti Rimac and the Rimac Group to a consortium led by HOF Capital, drawing a line under an adventure that never quite fit the brand’s identity.

Analyst Caution and a Stock Under Pressure

The market’s reaction has been measured at best. UBS analyst Patrick Hummel rates the stock “Neutral” with a €40 target, describing the quarter as meeting expectations but warning of a challenging year ahead. Barclays is more bearish with an “Underweight” rating and the same €40 target, arguing that the company’s full-year guidance relies on a favorable product mix that could be eroded by rising development costs. Bernstein Research, with a “Market-Perform” rating and €45 target, called the quarter “less dramatic than feared” but stopped well short of predicting a recovery.

The stock trades at €41.15, down roughly 13 percent since the start of the year. The gap to its 52-week low from March offers only a thin safety margin for investors.

Full-Year Targets Still in Play

Management is sticking to its guns for the current fiscal year. Revenue is expected to land between €35 billion and €36 billion, with an operating margin of up to 7.5 percent. Whether the cash flow strength and portfolio cleanup will be enough to restore market confidence remains an open question. The first real test comes this summer with the half-year results, followed by a Capital Markets Day in the autumn where Leiters will unveil the full details of his “Strategy 2035” — a plan that is already reshaping the company from the inside out.