Volkswagen Backer Porsche SE Urges Faster Cost Cuts as Losses Mount — Update

By Dominic Chopping

Volkswagen's major shareholder said the German automaker must take swift action to cut costs and improve profitability after its earnings were hit by impairments on its investment.

Porsche Automobil Holding SE, which holds more than 53% of ordinary shares in Volkswagen, said it swung to a loss in the first nine months of the year, mainly due to an impairment loss on the value of its investments in Volkswagen and sports-car maker Porsche AG.

"The persistently difficult conditions in the automotive industry are posing significant challenges for the core investments," Porsche SE said Tuesday.

Volkswagen slashed its full-year profit forecast in September and has presented plans for deep cost-saving measures as it grapples with multiple headwinds that include a deteriorating Chinese market, intensifying competition, U.S tariffs and elevated domestic manufacturing costs.

Volkswagen launched an original restructuring plan that saw an agreement with its powerful unions to cut 50,000 jobs across the group in Germany by 2030 and slash costs, while an additional plan approved a couple of months ago will see job losses double to 100,000 and its model portfolio halved. The company employed 648,000 people as of September.

Alongside the job cuts and a streamlined model range, Volkswagen is seeking simpler organizational structures, reduced vehicle costs, lower overhead costs, greater efficiency in its plants and faster technology development.

Volkswagen recently reported a 6.3% fall in third-quarter revenue to 75.28 billion euros ($84.51 billion), while the operating loss widened to 5.86 billion euros.

"The Volkswagen Group's quarterly results clearly show that the agreed measures to strengthen competitiveness, reduce costs and sustainably improve profitability must be implemented swiftly," Hans Dieter Poetsch, chairman of Porsche SE's executive board, said Tuesday. Poetsch is also chairman of Volkswagen's supervisory board.

"It is now the management's task and responsibility to deliver," he said.

Porsche SE has previously outlined plans to diversify its investments, including targeting the defense sector as it seeks to take advantage of increased demand for security.

In recent months the company spent a low double-digit million U.S. dollar amount acquiring a stake in U.S. space company Stoke Space Technologies, and earlier this year made further investments in quantum computer developer Quantum Motion, drone manufacturer Quantum Systems, AI platform for autonomous driving Waabi, and space launch service provider Isar Aerospace.

Porsche SE said that due to the noncash impairment losses it has recognized on the value of its investments in Volkswagen and Porsche AG, it reported a loss after tax of 2.78 billion euros in the first nine months of the year, from a profit of 1.24 billion euros in the year-ago period.

On an adjusted basis, profit after tax fell to 930 million euros from 1.59 billion euros.

Net debt at the end of September was little changed on year at 5.1 billion euros.

It still expects to report an adjusted group result after tax of between a 500 million-euro loss and a profit of 1.5 billion euros for the year, with net debt at between 4.7 billion and 5.2 billion euros.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

November 10, 2026 03:53 ET (08:53 GMT)