Key facts
- Porsche could face over 4,000 additional job cuts as part of Volkswagen's restructuring.
- The proposed cuts address an overhead shortfall of about €700 million.
- These potential cuts are in addition to previously agreed layoffs.
- Porsche's CEO Michael Leiters is under pressure to deliver a comeback strategy.
- Volkswagen's full-year margin target was revised down due to a writedown at Porsche.
Volkswagen's sweeping turnaround plan may involve more than 4,000 additional job cuts at its luxury sports car brand Porsche, according to a report by German business daily Handelsblatt. The proposed reductions are intended to address an overhead shortfall of approximately €700 million ($803.8 million).
These potential cuts would be in addition to existing agreements. In July, Porsche management and labor representatives had already agreed to 5,000 layoffs, on top of 4,000 determined earlier, bringing the total scope of agreed job cuts to about one in five by 2035.
The report follows Volkswagen's downward revision of its full-year margin target to a maximum of 1%, from a previous range of 4.0-5.5%. This revision was largely due to a writedown at Porsche, where CEO Michael Leiters is facing pressure to develop a comeback strategy amid declining sales in China and a costly reversal of the carmaker's electric vehicle strategy. Volkswagen can only recommend such measures to Porsche, not mandate them.