Volkswagen may cut another 4,100 jobs at Porsche
What's the story
Volkswagen is considering another round of job cuts at its luxury brand Porsche, according to German business daily Handelsblatt. The report said that files documenting a recent agreement by Volkswagen's supervisory board propose reducing "about 4,100 employees" at the brand. This comes on top of an earlier decision by Porsche management and labour representatives to lay off 5,000 workers and an additional 4,000 positions already in jeopardy.
Restructuring strategy
Volkswagen's restructuring plan
The proposed job cuts are part of Volkswagen's larger restructuring plan, which seeks to address an overhead shortfall of some €700 million ($803.8 million).
However, both Volkswagen and Porsche have declined to comment on the reported plans by the supervisory board.
Notably, while the parent company can recommend such measures at Porsche, it cannot mandate them.
Margin revision
Full-year margin target revised downwards
On Friday, Volkswagen revised its full-year margin target downwards to a maximum of 1%, from an earlier estimate of 4.0-5.5%.
The revision is mainly due to a writedown at Porsche and the costs associated with its job-cutting plan.
The company's CEO Michael Leiters is under pressure to deliver a comeback strategy after China sales plummeted and an expensive reversal of the carmaker's EV strategy.
Profit forecast
Volkswagen expects negative effects of €10 billion
Volkswagen AG has lowered its operating margin forecast due to a steep decline in the Chinese car market and costs related to its job-cutting plan.
The company also announced 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%, down from an earlier range of 4% to 5.5%.
Anticipated impact
Company agreed to double job cuts globally
Volkswagen expects negative effects of about €10 billion to weigh on its results this year.
The drastic cut in expectations comes after a hard-fought agreement with workers earlier this month that will double job cuts to 100,000 globally.
The company is among carmakers grappling with high costs due to underused plants in Germany and slumping profits from China, its biggest market.