Daimler AG to cut 10K jobs

Daimler will cut at least 10,000 jobs worldwide over the next three years, said the carmaker in a statement. The move follows job cuts by carmakers in the industry as they deepen their commitments towards electric vehicles, while grappling with weakening sales.

The announcement on cost cutting is the third this week by a major German car company with automakers allocating more funds towards cleaner and self-driving technologies.

“The automotive industry is in the middle of the biggest transformation in its history,” said Daimler in a statement.

Daimler has announced a 3% cut from its workforce after reaching an agreement on its plans with labor unions, who have agreed on a wide variety of measures including job cuts, expanding part-time retirement as well as a severance program which will be offered in Germany.

In addition to this, Daimler will also be cutting 10% from its worldwide management positions.

According to Wilfried Porth, a member of Daimler’s board who is in charge of human resources, job cuts would be in the low five-digits, or at least 10,000 people.

As of the end of its third quarter, Daimler employed 304,680 people.

As per plans laid out by Daimler in November 2019, the carmaker aimed to cut staff costs by around $1.54 billion (1.4 billion euros) by the end of 2022.

In recent months, Daimler has repeatedly cut its profit outlook in part to cover a regulatory crackdown on diesel emissions and also because of a slowdown in the auto market.

Last month, Daimler had said, the group’s operating profit will be “significantly lower” than the previous year.

Other measures to reduce staffing costs include offering shorter working weeks.

Daimler also said, agreements that were placed to prevent forced redundancies in Germany until 2029 will remain in place.

“A reduction in capacity must not be carried out on the backs of the employees,” said Michael Brecht, chairman of Daimler’s works council.

Categories: Creativity, Economy & Finance, Entrepreneurship, HR & Organization, Regulations & Legal, Strategy, Sustainability

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