Porsche AG Scraps Employee Bonuses for First Time in 18 Years as Restructuring Accelerates

Porsche eliminates profit-sharing for 27,000 workers, sells Bugatti Rimac stake, and targets margin recovery after net profit collapses 91% to €310 million.

Porsche has eliminated its annual profit-sharing payout for the first time since 2007, a stark signal of the financial strain gripping the Stuttgart-based automaker. The decision affects more than 27,000 employees across German sites, while the entire management board will forgo their bonuses and any increase to base compensation. The move follows a year in which the company’s net profit collapsed by 91 percent to just €310 million, and its operating margin shrank to roughly 1 percent.

The bonus cut comes as Porsche also executes a strategic retreat from its high-profile investment in electric hypercar ventures. The company is selling its entire 45 percent stake in Bugatti Rimac, along with its holding in the parent Rimac Group, to a consortium led by HOF Capital and BlueFive Capital. The purchase price remains undisclosed, and the transaction is expected to close by the end of 2026. CEO Michael Leiters has framed the divestment as part of a sharpened focus on Porsche’s core business.

Investors have reacted with unease to the mounting headwinds. Porsche shares slipped 1.5 percent on Monday to €40.77, bringing the year-to-date decline to roughly 14 percent. The stock briefly touched €40.84 earlier in the session. The luxury automaker is grappling with a triple threat: a softening Chinese market, intensifying price competition in the electric vehicle segment, and the looming risk of US tariffs.

China Weakness and the 911 Bright Spot

Porsche delivered approximately 61,000 vehicles worldwide in the first quarter, a 15 percent drop from the same period last year. The decline was most pronounced in China, where sales slumped by more than a fifth. Management has pointed to the end of production for certain combustion-engine models and the expiration of US tax incentives for EVs as additional drags on volume.

One notable exception to the downturn was the iconic 911. Deliveries of the sports car rose 22 percent to nearly 13,900 units, underscoring the enduring appeal of Porsche’s core nameplate even as broader demand softens.

Margin Targets and the Road Ahead

Porsche will report its official first-quarter financial results on April 29, offering the first concrete evidence of whether its restructuring efforts are gaining traction. For the full year, the company is targeting an operating return on sales between 5.5 percent and 7.5 percent, with revenue projected at up to €36 billion. The turnaround plan, however, continues to carry heavy costs, with restructuring charges running in the high hundreds of millions of euros.

The automaker is now prioritizing profitability over volume, aiming to defend margins in the face of EV pricing pressure and weakness in the luxury segment. The board and supervisory board have also proposed a sharply reduced dividend of €1.01 per preferred share, which will be put to a vote at the annual general meeting.

For a company that has long been synonymous with premium performance and financial resilience, the current period marks an unusually painful chapter. The coming quarterly report will test whether the strategy of margin over market share can deliver the recovery that Porsche’s shareholders and employees are counting on.