GoKawiilPorsche is closing three of its subsidiaries as it copes with falling sales and declining profits, the German automaker announced Friday.
The automaker’s battery subsidiary, Cellforce Group, is perhaps the highest-profile casualty. The division had already been through a “realignment” in August after Porsche dropped plans to make its own batteries, turning Cellforce into a research and development arm. Now, Porsche says it’s pursuing a “technology-open powertrain strategy” — corporate-speak that indicates the automaker will rely more heavily on other companies for its batteries.
Porsche eBike Performance, which made e-bike drive systems, and Cetitec, a networking software subsidiary that served both Porsche and the wider Volkswagen Group, will also be shut down.
More than 500 people, who are employed at the three subsidiaries, will lose their jobs.
“We must refocus on our core business,” Porsche CEO and Executive Chair 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.”
It’s a message that Leiters, who became CEO early this year, first delivered in March when the company announced plans to realign its business. “We will comprehensively reposition Porsche, make the company leaner, faster and the products even more desirable,” he said at the time.
Since then, Porsche has extracted itself from several endeavors, including an agreement reached in April to sell its equity stakes in Bugatti Rimac and Rimac Group to a consortium led by New York-based investment firm HOF Capital.
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