Volkswagen profit plunges 42% in third quarter amid sweeping overhaul plans

German automaker Volkswagen on Wednesday reported a 42% drop in operating profit in the third quarter.

Operating profit fell to 2.86 billion euros ($3.1 billion), while third quarter sales revenues slipped 0.5% year on year to around 78.5 billion euros.

The third quarter results come after Volkswagen last month cut its 2024 annual outlook for the second time in just a few months. At the time, the car maker said it was expecting a profit margin of around 5.6% for the year, along with a 0.7% drop in sales.

Volkswagen has been in hot water in recent months, warning of potential plant closures in Germany and scrapping a slew of labor agreements with local workers in September. The company also said it would end its employment protection agreement, which has been in place for its German workforce since 1994.

On Monday, the Volkswagen works council said the company's management was planning widespread pay cuts and layoffs, as well as the closure or size reduction of all of its German plants.

In response, Volkswagen reiterated the need for restructuring and said that it would present plans for work cost cuts during a round of negotiations about the labor agreements, which is also taking place on Wednesday.

This breaking news story is being updated.