VW sharply cuts full-year margin forecast to below 1%; Porsche to cut an additional 4,100 jobs

Europe's largest automaker, VW, sharply cut its full-year 2026 forecast on 18 September, revising its previous operating margin guidance to below 1%. This leaves the profitability outlook for the group, whose annual revenue exceeds €300 billion, under severe pressure.

Regulatory disclosures again indicated approximately €6 billion in goodwill impairment at the Porsche brand and total special items of approximately €10 billion, alongside an outlook for a significant deterioration in the Chinese market. The Supervisory Board also approved an additional reduction of approximately 4,100 employees at the Porsche brand, aimed at offsetting approximately €700 million in indirect costs.

This is not the first workforce reduction at Porsche. The company announced cuts affecting more than 4,000 employees in March 2023 and an additional reduction of approximately 5,000 employees in July 2024, bringing the expected total reduction over the two-year period to approximately 13,000 employees.

For the VW Group as a whole, fiscal 2025 revenue was €321.91 billion and operating profit was approximately €8.9 billion, with the operating margin declining from 5.9% to 2.8%. Operating profit of €5.9 billion and profit after tax of €3.1 billion in the first half of 2026 are expected to remain below the levels recorded in the same period of the previous year.

The immediate factor behind the downgrade was goodwill impairment at Porsche. Against the backdrop of developments in the Chinese market and the progress of the shift to BEVs, VW also indicated that the outlooks for the Audi and VW brands could be downgraded.

While pursuing restructuring and an expanded product lineup in China, VW plans to launch more than 30 new models in China by the end of 2027 and more than 50 by the end of 2030. The focus will be on whether these measures lead to a recovery in profitability.