Approximately 5,000 German employees at Mercedes Car Group have accepted a voluntary redundancy package offered by parent DaimlerChrysler, Reuters reports.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Mercedes is looking to cut a total of 8,500 German jobs by the end of 2006 as part of its goal to double its operating margin to 7 percent by the following year, but agreed in 2004 not to lay off any workers until 2012, the report said.
“This means that around 60 percent of the 12-month target has been achieved just three months after starting the voluntary programme,” the company said in a statement, adding that it continued to view achieving the personnel reductions targeted as realistic.
The job cuts are expected to cost it 950 million euros ($1.15 billion).
To fund the redundancy programme, the company recently said it would receive a cash inflow of 1 billion euros from offloading its heavy diesel engine unit MTU Friedrichshafen to Swedish private equity firm EQT.
“The cost of implementing the programme is within the specified financial scope,” the company said.
Of the 5,000 staff that signed up to the deal by the end of 2005, roughly 1,100 contracts are for early retirement, the report added.
