Mercedes-Benz has reached an agreement with its works council to offer voluntary redundancies and halve planned salary increases. The aim? Reduce costs and restore the company's profitability in a rapidly changing European automotive market.
A downsizing plan, but no compulsory redundancies
While Mercedes hasn’t specified the exact number of jobs to be cut, it does say assembly-line workers will not be affected, and that there will be no forced redundancies. The company has extended the job guarantee for its employees until the end of 2034.
The main features of the plan are not to fill certain positions left vacant by retirements and departures, and to outsource certain functions such as finance, human resources and purchasing.
Objective: 10-percent reduction in production costs by 2027
Mercedes-Benz has set itself an ambitious target: to reduce production costs by 10 percent by 2027, and by another 10 percent by 2030. The plan complements a strategy already underway since 2020, which aims to reduce costs by 20 percent between 2019 and 2025.
During the presentation of the company’s annual results, CFO Harald Wilhelm reaffirmed the need to rationalize spending in the face of growing economic pressure.
A tense climate in the European automotive industry
The European automotive sector is going through a difficult period. Several automakers and parts suppliers have already announced massive job cuts. In Germany, trade unions are taking a stand against plant closures and relocations planned by certain brands.
Against this tense backdrop, Mercedes-Benz is trying to strike a balance between cutting costs and maintaining social peace.
A strategic gamble for the future
With this restructuring, Mercedes-Benz is seeking to optimize its competitiveness while preserving part of its workforce. It remains to be seen whether the strategy will be enough to restore profitability without damaging the company's social image.