Porsche Job Cuts: 4,100 More on the Line in VW Overhaul

Volkswagen's turnaround plan could cut about 4,100 more jobs at Porsche, closing an overhead shortfall of roughly 700 million euros (about $803.8 million), German business daily Handelsblatt, Reuters reported on Saturday. The proposal is documented in files from a recent agreement by Volkswagen's supervisory board, which is preparing what would be the German auto group's largest restructuring yet.

The newspaper said the Porsche job cuts would be "in addition to existing agreements" — a key detail, because Porsche has already signed off on deep reductions. In July, Porsche management and labour representatives agreed to 5,000 more layoffs on top of 4,000 cuts agreed earlier, bringing confirmed reductions to about 9,000, or roughly one in five jobs at Porsche, by 2035. If the newly reported proposal were adopted, total cuts at Porsche could approach 13,000.

Volkswagen declined to comment, and a Porsche spokesperson declined to comment on the reported plans of the supervisory board. Reuters, which carried the Handelsblatt report, noted that Volkswagen can only recommend such measures at Porsche, not mandate them, because Porsche retains a degree of independence within the group.

Why Porsche is losing jobs

The report came a day after Volkswagen issued one of its starkest profit warnings in years. On Friday, the company slashed its 2026 operating margin target to no more than 1%, down from a previous range of 4.0% to 5.5%. Negative effects of about 10 billion euros will weigh on this year's results, the company said, with most of the charges landing in the third quarter. Analysts had on average expected a margin of 4.1%, according to Reuters, so the new target was far below market assumptions.

The biggest single item is a 6-billion-euro writedown at Porsche, reflecting lower long-term expectations for the brand's earnings. It is a non-cash goodwill impairment, so it does not immediately affect cash flow, but it wiped a large share of the year's expected profit off the books. About 2 billion euros more in charges will weigh on the second half of 2026, tied to expanded pre-retirement plans, the planned sale of the Osnabrück plant and further impairments in China.

China is the other pillar of the problem. Porsche sales there have fallen sharply as domestic manufacturers take market share and the broader economy stays weak. Volkswagen said the Chinese market has contracted by about 20%, with no stabilization in sight. Finance chief Arno Antlitz told colleagues the company has "no time to lose," in an internal memo seen by Reuters, pointing to the China contraction, Asian rivals entering Europe and rising sales of less profitable electric cars.

Volkswagen also said the faster-than-expected shift toward battery-electric vehicles is squeezing profitability at its namesake brand and at Audi, because electric models earn lower margins than comparable combustion-engine cars. The warning came two days after the Federal Reserve raised interest rates for the first time in three years, a move that will raise borrowing costs for car buyers and manufacturers alike. Stripping out the one-off charges, the company said its operating margin would be about 4%. Full-year revenue guidance was kept at roughly 315 billion euros, with sales expected to be flat or down by as much as 3%.

Porsche chief executive Michael Leiters is under pressure to produce a comeback strategy after the China sales collapse and a costly reversal of the brand's electric vehicle plans. Porsche has already thinned its network of Chinese dealerships as it tries to protect pricing in a shrinking market. The brand is scheduled to present a strategy update on October 7, ahead of Volkswagen's third-quarter results on October 29.

What comes next

Markets punished Volkswagen after Friday's warning. The shares fell as much as 7.5% before closing 5.6% lower. Porsche stock dropped 3.3%, and Porsche SE, Volkswagen's top shareholder, cut its own outlook to a group result of between minus 500 million and 1.5 billion euros, sending its shares 4.9% lower. BMW, Mercedes-Benz and Ford shares also fell.

Oil is adding to the pressure. Brent crude is trading above one hundred dollars a barrel while the attacks on tankers in the Strait of Hormuz disrupt shipping, lifting fuel and transport costs for carmakers.

The Porsche proposal sits inside a much larger Volkswagen restructuring. Earlier in September, the company agreed a deal with labour representatives that could double planned job cuts to one hundred thousand worldwide, while management also looks to cut excess factory capacity in Germany. Options on the table include selling the Osnabrück plant and widening early-retirement schemes.

None of these proposed cuts are final. Workers have a formal voice in such decisions under German law, so talks between employee representatives and Porsche's management will decide what happens next. Porsche presents its strategy update on October 7, and Volkswagen reports third-quarter results on October 29.