Volkswagen Slashes Profit Forecast for 2026, Porsche Faces Thousands More Job Cuts

Volkswagen, one of the world's largest carmakers, has faced mounting pressure from a slowdown in the Chinese automotive market and stiffer competition. At the same time, its luxury brand Porsche, once considered a star performer, began to struggle with falling demand and higher costs.

These issues came to a head as Volkswagen's financial performance weakened, forcing the company to review its forecasts and consider drastic measures to stabilize its business.

On September 18, 2026, Volkswagen announced a significant cut to its profit forecast for the year, lowering its expected operating margin to just one percent. This was a steep drop from the previously anticipated four to five and a half percent, and reflected both a sharp contraction in the Chinese market and the costs of restructuring.

Volkswagen also revealed a massive writedown of up to 10 billion euros related to Porsche, which had once been a major source of profit for the group. The news sent share prices for both Volkswagen and Porsche tumbling, with VW stock dropping as much as 7 percent.

Shortly after, reports surfaced that Porsche was facing the prospect of an additional 4,100 job cuts as part of Volkswagen's turnaround plan. This would come on top of thousands of layoffs already announced earlier in the year. The scale of the cuts was described as much larger than initially expected.

The bad news continued as Volkswagen was removed from the Euro Stoxx 50 index, a key benchmark for Europe's biggest companies, following its sharp stock decline. The automaker's troubles have become a central story in the European automotive sector.

Volkswagen is now dealing with the fallout from its profit downgrade, a major writedown at Porsche, and the prospect of thousands more job losses at its luxury subsidiary. The company's leadership has promised to accelerate cost-cutting efforts to try to restore profitability.

Investor confidence has taken a hit, with Volkswagen and Porsche share prices at multi-year lows. The automaker's removal from the Euro Stoxx 50 index is seen as a symbolic blow, highlighting the seriousness of its current crisis.

The key questions now are whether Volkswagen's cost-cutting program will be enough to turn things around, and how many jobs at Porsche will ultimately be lost. Analysts and workers alike are waiting for more details on the restructuring plan and its impact on the company's future.