Daimler is to end work -hour reductions a month earlier than planned because of stronger demand for its vehicles.

Some 96,000 workers will return to regular hours in June, after having hours and pay cut by 8.75% since May 2009, the company said.

Chief executive officer Dieter Zetsche said in a statement: “Demand for our products is currently developing very positively and global markets are recovering gradually. This requires a corresponding adjustment of capacity.”

The work hour cuts, which were due to expire at the end of June, were part of a package of measures agreed in April 2009 to reduce Daimler’s labour costs by EUR2bn (US$2.5bn). The manufacturer raised its 2010 forecast for earnings before interest and taxes by 74% on 27 April after demand for Mercedes-Benz cars saw a return to profit in the first quarter.

Daimler still has three factories that will be operating reduced shifts throughout June, including truck facilities in Kassel and Mannheim, and a factory in Berlin which makes car engines and components.

These three factories had 5,300 employees working reduced hours at the end of March.