’s latest turnaround push could bring another round of job cuts at Porsche, with more than 4,000 positions reportedly at risk.
In July, management and labour representatives announced an additional 5,000 layoffs on top of the 4,000 previously agreed.
German business daily Handelsblatt reported on Saturday, “Files documenting a recent agreement by Volkswagen’s supervisory board to usher in the German auto group’s largest restructuring yet propose reducing ‘about 4,100 employees’ at the brand, addressing an overhead shortfall of some €700 million ($803.8 million)”
The job cuts would be “in addition to existing agreements,” the newspaper added.
Both Volkswagen and Porsche declined to comment on the reported plans of Volkswagen’s supervisory board.
The parent company can only recommend, but not mandate, such measures at Porsche.
Volkswagen on Friday revised down its full-year margin target, now targeting 1% at best rather than the previous range of 4.0-5.5%.
The revision was due in large part to a writedown at Porsche, where CEO Michael Leiters is under pressure to deliver a comeback strategy following a collapse in China sales and a costly reversal of the carmaker’s EV strategy.
Volkswagen cuts profit outlook
Volkswagen AG lowered its operating margin forecast, reflecting a sharp contraction in the Chinese car market and costs related to its job-cutting plan. The carmaker also cited a €6 billion ($6.9 billion) writedown on the value of its stake in Porsche AG.
The German manufacturer now expects a return of no more than 1%, it said Friday, down from a range of 4% to 5.5%. The shares fell as much as 7.5%, the biggest intra-day drop in a year, spilling over to other manufacturers like BMW AG and Mercedes-Benz Group AG.
VW expects negative effects in the region of €10 billion to drag on its results this year. The drastic cut to expectations follows a hard-won agreement with workers this month that will double job cuts to 100,000 globally. VW is among carmakers struggling with high costs as plants in Germany are underused.
Profits from China, the company’s biggest market, have slumped among an extended real estate crisis. China’s car market has cratered by more than a fifth through August this year. The decline is worse for VW, which is struggling to offer competitive s there.