Finance
Mercedes-Benz to cut headcount, lower pay increases amid cost-cutting drive
Published by Global Banking & Finance Review®
Posted on March 4, 2025
2 min readLast updated: January 25, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on March 4, 2025
2 min readLast updated: January 25, 2026
Mercedes-Benz plans to cut workforce and reduce salary hikes, ensuring job security until 2034, as part of a cost-cutting initiative.
FRANKFURT (Reuters) - Mercedes-Benz has won agreement from its works council to offer buy-outs to staff and reduced planned salary increases by half, it said on Tuesday, part of a wider cost-cutting drive as the carmaker battles to revive earnings.
The company declined to specify how many jobs will be cut, but said workers in production would not be affected and that redundancies had been ruled out, with management agreeing to extend a job security guarantee until the end of 2034.
CFO Harald Wilhelm said at the carmaker's annual results conference last month that it planned to outsource areas from finance and human resources to procurement, reducing the size of the workforce through not replacing workers who retire and negotiating voluntary redundancies.
Mercedes-Benz plans to reduce production costs by 10% by 2027 and double that by 2030, beyond an ongoing plan launched in 2020 to reduce costs by 20% between 2019 and 2025.
Europe's auto industry faces a swathe of challenges this year, with carmakers and component makers announcing deep cuts and Germany's powerful unions putting up a fierce fight against pressure by management to cut jobs, close factories and move staff abroad.
(Reporting by Ludwig Burger, Victoria Waldersee, Editing by Friederike Heine)
Mercedes-Benz plans to offer buy-outs to staff and reduce planned salary increases by half as part of its cost-cutting strategy.
The company has stated that workers in production will not be affected, and redundancies have been ruled out.
Mercedes-Benz aims to reduce production costs by 10% by 2027 and double that by 2030, building on a previous plan to cut costs by 20% between 2019 and 2025.
The company plans to outsource functions from finance and human resources to procurement as part of its strategy to reduce workforce size.
Europe's auto industry is encountering numerous challenges, with carmakers and component makers announcing significant cuts while facing strong resistance from powerful unions.
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