Mercedes-Benz also plans to cut up to 25% of its staff in the future, what is happening?
As the automotive world keeps shifting in directions no one could predict, Mercedes-Benz seems to also be feeling the crunch. We know this because the German automaker is planning to reduce its sales and finance workforce in China by 10 to 15 percent, as part of a broader strategy to cut costs in the region.
Mercedes-Benz also aims to reduce office-based roles in China by 25 percent by 2027. Despite these cuts, approximately 2,000 employees working in research and development (R&D) at Mercedes-Benz China will remain unaffected, signaling the company’s commitment to adapting its products specifically for the Chinese market, where competition is intensifying.
Moreover, this move is part of Mercedes-Benz’s global cost-cutting initiative, which was announced alongside a warning that the company’s earnings for 2025 are expected to decline significantly compared to the previous year. However, despite these reductions, Mercedes-Benz plans to continue investing heavily in China to protect its market share.
While a spokesperson for Mercedes-Benz China declined to comment on the specifics of the 10 to 15 percent reduction in the sales and finance workforce, they did address claims regarding the 25 percent reduction in office-based roles, labeling the figure as incorrect, though no further details were provided.
Mercedes-Benz also remains focused on enhancing its competitiveness by forming more partnerships with local suppliers in China. These partnerships are seen as key to improving product offerings and ensuring the brand remains competitive in the rapidly evolving market.
On top of that, Mercedes-Benz’s Chief Financial Officer, Harald Wilhelm, shared in a recent investors’ conference that the company’s joint venture with BAIC Motors, known as BBAC, is working on cutting material and production costs.
BBAC, which employs production workers in China, plans to reduce material costs by over 10 percent and production costs by more than 20 percent. Wilhelm emphasized that this cost-cutting strategy is designed to “rightsize” the company’s operations and maintain strong margins. He described the joint venture as “damn healthy,” projecting a return on sales of 15 percent in 2024.
To mitigate risks from rising trade tensions between the United States and China, Mercedes-Benz also intends to localize more production in both countries. This strategy aims to shield the company from geopolitical risks and enhance its operational flexibility.
We got all this from Reuters and their full article is linked here. Thank you Reuters for the information and images.
