Daimler plans to axe at least 10,000 jobs worldwide to improve profit margins squeezed by heavy investments in electric and self-driving vehicles, a move that follows German rivals BMW and Volkswagen's Audi division.
The cuts, accounting for at least 3.3% of the workforce, would be carried out by the end of 2022 as part of efforts to reduce personnel spending by EUR1.4bn euros ($1.5bn), Bloomberg reported, citing a Daimler statement.
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The company plans to extend early retirement programmes and offer buyouts to reduce administrative staff in Germany.
"The expenditure needed to achieve the CO2 targets require comprehensive measures to increase efficiency in all areas of our company. This also includes streamlining our processes and structures," Daimler chairman Ola Kaellenius said at a Capital Markets Day on 14 November.
"This will have a negative impact on our earnings in 2020 and 2021. To remain successful in the future, we must therefore act now and significantly increase our financial strength."
In a statement, the automaker added: "By the end of 2022, Mercedes-Benz Cars plans to save more than EUR1bn in personnel costs. To this end, jobs are to be reduced in both management and the indirect areas. The company is in close dialog with the employee representatives in order to make the measures as acceptable as possible."
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By GlobalDataAccording to Bloomberg, Daimler personnel chief Wilfried Porth said the total number of jobs to be reduced worldwide was in the "low five-digit range" and included the loss of 10% of management positions.
As with an Audi announcement of 9,500 job cuts earlier this week, a labour agreement rules out forced layoffs until 2029.
Bloomberg noted a 2020 target of at least 4% operating return on sales at the main Mercedes cars unit disappointed investors, coming in at less than half of what PSA Group generated in the first half of this year.
"We will make the measures as socially responsible as possible," Porth was quoted as saying in a separate statement.
Daimler would offer to reduce weekly work hours and allow contracts for most temporary workers in administrative roles to expire, Bloomberg said.
The terms of Daimler's existing collective bargaining agreement, including a scheduled pay raise next year, remained unaffected by the cutbacks, the automaker's works council said in a separate statement cited by Bloomberg.
Also this week, BMW said it had reached agreement on reducing bonuses for workers based on company profits, as well changes to Christmas and other bonuses for some workers, effective next year.
