Mercedes-Benz Plans Job Cuts and Lower Pay Hikes to Boost Profits

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Mercedes-Benz has secured approval from its works council to offer voluntary buyouts to staff and reduce planned salary increases by 50%, as part of a broader cost-cutting strategy aimed at boosting earnings. 

The company did not specify how many jobs would be cut but emphasized that production workers would not be impacted, and there would be no layoffs. Management also agreed to extend job security guarantees for employees until the end of 2034.

CFO Harald Wilhelm mentioned during the company’s annual results conference last month that Mercedes plans to outsource some functions, such as finance, human resources, and procurement, and reduce its workforce by not replacing retirees and offering voluntary redundancies.

The automaker aims to cut production costs by 10% by 2027, with plans to double that reduction by 2030, in addition to an ongoing cost-reduction program set to decrease costs by 20% between 2019 and 2025. European carmakers are facing significant challenges, with many announcing large cuts, while Germany’s powerful unions are pushing back against management's efforts to reduce jobs, shut down factories, and relocate staff overseas.

Paraphrasing text from "Reuters" all rights reserved by the original author