Porsche faces 4,100 more job cuts under VW restructuring

Volkswagen's turnaround plan calls for roughly 4,100 additional job cuts at its sports car subsidiary Porsche Dr. Ing. h.c. F. Porsche AG, German business daily Handelsblatt reported on Saturday, piling further pressure on a brand already grappling with collapsing sales in China and a costly reversal of its electric vehicle strategy.

Documents tied to a recent agreement by Volkswagen's supervisory board to implement the automaker's largest-ever restructuring propose the reduction of "about 4,100 employees" at Porsche, according to the Handelsblatt report, as cited by Reuters. The cuts are aimed at closing an overhead shortfall of around €700 million ($803.8 million) and would come "in addition to existing agreements," the newspaper reported.indiatoday+1

A Deepening Workforce Reduction

The proposed cuts would add to an already steep headcount reduction at the Stuttgart-based carmaker. In July, Porsche management and labor representatives agreed to 5,000 additional layoffs on top of 4,000 job cuts determined earlier. If the latest proposed reductions proceed, the total scope of agreed cuts would amount to roughly one in five Porsche employees by 2035.indiatoday+1

Volkswagen declined to comment on the report, as did a Porsche spokesperson. Volkswagen, as Porsche's parent company, can recommend such measures but cannot mandate them at the subsidiary.indiatoday

Profit Warning Deepens the Crisis

The Handelsblatt report followed a profit warning issued by Volkswagen on Friday, September 18, when the company slashed its full-year operating margin target to just 1%, down from a prior range of 4.0% to 5.5%. The revision was driven largely by roughly €10 billion ($11.5 billion) in one-off costs, with around €6 billion in impairments stemming from a worsened outlook for Porsche. Volkswagen shares fell sharply on the news.reuters+1

Pressure on Porsche's Leadership

Porsche CEO Michael Leiters faces mounting pressure to deliver a turnaround strategy after a collapse in Chinese sales and the expensive pivot away from its earlier all-electric ambitions. The brand's deteriorating performance has become a drag on the wider Volkswagen group, which is already undertaking the largest restructuring in its history.reuters+2