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Porsche faces 4,100 more job cuts as Volkswagen pushes sweeping turnaround: Report
Handelsblatt report says the cuts would come on top of 9,000 layoffs already agreed at the sports car brand
MUMBAI: Volkswagen is considering more than 4,000 additional job cuts at Porsche as part of its sweeping turnaround plan, according to a report by German business daily Handelsblatt.
Documents related to a recent agreement by Volkswagen’s supervisory board reportedly propose a reduction of about 4,100 employees at Porsche. The move is aimed at addressing an overhead shortfall of around €700 million ($803.8 million), the report said.
The proposed cuts would come on top of existing job reduction agreements at the sports car brand.
Porsche management and labour representatives agreed in July to cut another 5,000 jobs, following an earlier agreement covering 4,000 positions.
That would take the number of currently agreed job cuts to around 9,000, equivalent to roughly one in five positions at the Stuttgart-based sports car maker by 2035.
The latest reported restructuring plans come after Volkswagen cut its full-year margin outlook on Friday. The group now expects an operating margin of no more than 1 per cent, compared with its previous target range of 4 to 5.5 per cent.
The downgrade was largely linked to a writedown at Porsche, which has been struggling with weaker sales in China and the costly reversal of its electric vehicle strategy.
Porsche CEO Michael Leiters is under pressure to deliver a turnaround strategy as the sports car maker works to address the challenges facing its business.
The additional job cuts, if implemented, would form part of Volkswagen’s broader restructuring drive as the group seeks to reduce costs and improve profitability across its operations.
