Volkswagen's broader turnaround strategy could bring more than 4,000 additional job losses at Porsche, according to a report by German business daily Handelsblatt published Saturday. The news follows a recent profit warning tied to troubles at the sports car brand.

Handelsblatt said internal documents outlining a recent agreement by Volkswagen's supervisory board — part of what would be the German auto group's largest restructuring effort to date — call for cutting "about 4,100 employees" at Porsche. The move is intended to close an overhead gap of roughly €700 million, equivalent to about US$803.8 million or RM32 billion.

According to the report, these reductions would come on top of layoffs already agreed upon. In July, Porsche's management and labor representatives had settled on an additional 5,000 job cuts, adding to 4,000 previously agreed. Combined, the currently approved reductions would eliminate around one in five jobs at the Stuttgart-based manufacturer of the 911 by 2035.

Volkswagen declined to comment on the Handelsblatt report, and a Porsche spokesperson likewise declined to address the supervisory board's reported plans. Notably, Volkswagen, as the parent company, can only recommend such workforce measures at Porsche — it cannot impose them directly.

The report emerges just after Volkswagen slashed its full-year profit margin outlook on Friday, now projecting a margin of just 1% at best, down sharply from its earlier forecast range of 4.0% to 5.5%.

The downgraded guidance was driven largely by a writedown linked to Porsche's struggles. Porsche CEO Michael Leiters is currently under pressure to engineer a turnaround for the brand after a steep decline in sales in China and a costly retreat from its earlier electric vehicle strategy.

The developments underscore the mounting challenges facing Porsche as it navigates shifting demand in key markets and recalibrates its product strategy following an aggressive earlier push toward electrification. With Volkswagen's own financial targets now under strain, the pressure on its luxury sports car unit to stabilize costs and restore profitability appears set to intensify in the months ahead.

Source: The Edge Malaysia

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