Porsche CEO says 9,000 job-cut plan will not expand

Porsche CEO Michael Leiters has told employees the sports-car maker has no plans to expand an existing agreement for 9,000 job reductions, according to Reuters, which saw an internal staff memo on September 21.

The agreed cuts already cover around one in five jobs by 2035. Management and labor representatives reached an agreement in July for 5,000 layoffs on top of 4,000 determined earlier. Leiters’ assurance concerns an expansion of that program, not a reversal.

His message followed a Handelsblatt report that documents covering Volkswagen’s supervisory-board turnaround agreement proposed about 4,100 further reductions at Porsche. Those cuts would come on top of existing agreements and address an overhead shortfall of some €700 million, according to the newspaper’s account, carried by Reuters on September 19.

Financial pressure has intensified. Volkswagen lowered its full-year margin target to 1% at best from a previous range of 4.0% to 5.5%, largely because of a writedown at Porsche, Reuters reported. Leiters faces pressure to deliver a comeback strategy after a collapse in China sales and a costly reversal of Porsche’s electric-vehicle strategy.

But Volkswagen can recommend workforce reductions at Porsche, not mandate them, according to Reuters. In his memo, Leiters said Porsche’s own supervisory board had approved the existing restructuring plan. “We do not anticipate any changes to it,” he wrote, according to Reuters.