According to foreign media reports, Mercedes-Benz said on March 4 that it has won the consent of the Labor and Industrial Commission and will provide employees with voluntary resignation compensation plans and cut the original plan salary increase by half. This is part of a broader cost-cutting move by Mercedes-Benz to boost profitability.
Mercedes-Benz declined to say how many jobs it would cut, but said workers in production jobs would not be affected and ruled out the possibility of forced layoffs. In addition, management has agreed to extend the work guarantee period until the end of 2034.
Mercedes-Benz Chief Financial Officer Harald Wilhelm said at the annual results conference in February that the company plans to outsourcing its business in the fields of finance, human resources and procurement, and reduce its employee size by not replenishing vacancies for retired employees and negotiating employees' voluntary departures.
Mercedes-Benz plans to reduce production costs by 10% by 2027 and triple the decline by 2030. And that comes after the company launched an ongoing plan in 2020 with the goal of reducing costs by 20% between 2019 and 2025.
Recently, Mercedes-Benz also announced that it plans to cut its Chinese company's office spending by 25% by 2027, including cutting 10% to 15% of sales and financial positions due to its sluggish sales in China, the world's largest single market. However, Mercedes-Benz China's 2,000 R&D employees will not be affected by the layoffs.
In 2024, Mercedes-Benz Group's revenue and profits showed a downward trend. Among them, revenue was 145.594 billion euros, a year-on-year decrease of 4.5%; profit before interest and tax (EBIT) was 13.599 billion euros, a year-on-year decrease of 30.8%. Net profit was 10.409 billion euros, a year-on-year decrease of 28.4%. The group's earnings per share (EPS) was 10.19 euros, down 24.3% year-on-year.
This year, the European automotive industry continues to face a series of challenges. Automakers and parts suppliers have announced substantial cost cuts, while Germany's strong union has fought fiercely against pressures from corporate management to lay off employees, closure of factories and transfer employees abroad.