Mercedes-Benz To Offer Buy-Outs, Slash Salary Hikes By Half, See What Led To This Decision
Mercedes-Benz is looking to reduce headcount and cut down the salary hikes for its employees by half. The automaker on Tuesday announced that it has received the approval of its works council to offer buy-outs to employees and reduce the planned wage increases by half. This is part of the German carmaker’s wider plans to cut down on costs as it tries to recover earnings, reported Reuters. While the company didn’t specify exactly how many jobs will be impacted as part of the restructuring, it noted that workers in production will not be affected by the measure. Also Read : Ola Chief Takes A Leaf Out Of Musk's DOGE Playbook Says Report, Here's What He Ordered Automaker To Avoid Firing Employees Further, the company also ruled out redundancies and management agreed to provide an extension to the job security guarantee until 2034 end. Speaking at the company’s annual results conference earlier last month, CFO Harald Wilhelm said that the firm planned to outsource areas from finance and human resources to procurement, essentially slashing the workforce size through not bringing workers to replace the ones who retire and negotiating voluntary redundancies. Mercedes-Benz also plans to slash production costs by 10 per cent by 2027 and nearly double that by the end of the decade. This is in addition to the plan launched in 2020 to cut down on costs by 20 per cent between 2019 and 2025. Also Read : Canada Retaliates Against Donald Trump's Fresh Tariffs, Trudeau Says US Violating FTA European Auto Players In Trouble Notably, the auto industry in Europe has been struggling this year, with carmakers and component makers announcing layoffs. Meanwhile, German unions have been engaged in a fierce battle against pressure by manufacturers to reduce jobs, shut down factories, and shift workforce abroad. Volkswagen, the top carmaker in Europe, announced last year that it will reduce 35,000 jobs and slash factory output by almost a quarter in Germany. The biggest auto parts supplier in the world, Bosch, in November said that it intends to cut down 5,500 jobs by 2032 in German sites, mostly in cross-domain computer solutions and steering divisions. Further, the company said it will reduce working hours for some employees.
Mercedes-Benz is looking to reduce headcount and cut down the salary hikes for its employees by half. The automaker on Tuesday announced that it has received the approval of its works council to offer buy-outs to employees and reduce the planned wage increases by half.
This is part of the German carmaker’s wider plans to cut down on costs as it tries to recover earnings, reported Reuters. While the company didn’t specify exactly how many jobs will be impacted as part of the restructuring, it noted that workers in production will not be affected by the measure.
Also Read : Ola Chief Takes A Leaf Out Of Musk's DOGE Playbook Says Report, Here's What He Ordered
Automaker To Avoid Firing Employees
Further, the company also ruled out redundancies and management agreed to provide an extension to the job security guarantee until 2034 end. Speaking at the company’s annual results conference earlier last month, CFO Harald Wilhelm said that the firm planned to outsource areas from finance and human resources to procurement, essentially slashing the workforce size through not bringing workers to replace the ones who retire and negotiating voluntary redundancies.
Mercedes-Benz also plans to slash production costs by 10 per cent by 2027 and nearly double that by the end of the decade. This is in addition to the plan launched in 2020 to cut down on costs by 20 per cent between 2019 and 2025.
Also Read : Canada Retaliates Against Donald Trump's Fresh Tariffs, Trudeau Says US Violating FTA
European Auto Players In Trouble
Notably, the auto industry in Europe has been struggling this year, with carmakers and component makers announcing layoffs. Meanwhile, German unions have been engaged in a fierce battle against pressure by manufacturers to reduce jobs, shut down factories, and shift workforce abroad.
Volkswagen, the top carmaker in Europe, announced last year that it will reduce 35,000 jobs and slash factory output by almost a quarter in Germany. The biggest auto parts supplier in the world, Bosch, in November said that it intends to cut down 5,500 jobs by 2032 in German sites, mostly in cross-domain computer solutions and steering divisions. Further, the company said it will reduce working hours for some employees.
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