Volkswagen proposes 4,100 further job cuts at Porsche following six billion euro writedown

Proposed job cuts at Porsche

Volkswagen has proposed eliminating about 4,100 additional jobs at its sports car subsidiary Porsche, according to documents from a supervisory board meeting in early September reported by Handelsblatt. The planned workforce reduction applies to the Sport Luxury brand group and would take effect in addition to existing labour agreements. In 2025, an initial restructuring pact mandated the reduction of 3,900 jobs at Porsche along with 500 positions at subsidiary companies. In July, management and labour representatives agreed to cut another 5,000 jobs by 2035, already putting nearly one in five roles at risk. If the latest proposal is implemented, total planned job cuts across the brand will exceed 13,000 positions. Neither Volkswagen nor Porsche immediately issued a formal comment on the report.

Financial targets and overhead gaps

The additional cuts aim to address an overhead shortfall of approximately 700 million euros, equivalent to 803.8 million dollars. Volkswagen plans for Porsche to improve its operating result by 3.8 billion euros by the end of the decade. The brand's turnaround roadmap requires 1.8 billion euros in total overhead savings, but current documented measures account for only 1.1 billion euros. Because overhead includes general administration and personnel expenses, group leadership in Wolfsburg considers further staff reductions necessary to bridge the remaining financial gap. Porsche chief executive Michael Leiters presented revised volume projections to the supervisory board shortly before the announcement, pointing to reduced sales expectations for coming years. The lower delivery volumes have constrained the effectiveness of existing savings programs.

Profit warning and writedowns at Volkswagen

The restructuring plan follows a revised annual financial outlook issued by Volkswagen on Friday, 18 September. The parent group lowered its full-year operating return on sales forecast to 1% at best, down from a previous expectation of 4.0% to 5.5%. Volkswagen recorded an operating margin of 2.8% in the previous year. The reduced forecast stems primarily from a 6 billion euro writedown on its Porsche holding. While Porsche targets an operating return on sales between 10% and 15%, the brand achieved just under 8% in the first half of the year. The group convened a special executive board meeting on Friday afternoon to approve the profit revision.

Market pressures and restructuring outlook

The financial difficulties reflect declining vehicle demand in key international markets. Deliveries in China have dropped sharply, while higher import tariffs in the United States have created additional headwinds. Capital expenditures into electric vehicles have also failed to generate anticipated returns, following a peak three years ago when Porsche achieved record annual sales of approximately 320,000 cars. Because Porsche has operated as an independent listed company following its 2022 stock market debut, Volkswagen can recommend workforce reductions but cannot legally mandate them. Questions remain regarding whether the proposed cuts will affect production sites in Stuttgart, Leipzig, or overseas operations. Company documentation also leaves open whether the agreed sale of the MHP consulting division to Tata Consultancy Services is counted toward the target.