Mercedes-Benz To Restart Voluntary Redundancy Programme In Germany

German luxury carmaker Mercedes-Benz has announced plans to restart its voluntary redundancy programme in Germany in December as it seeks to reduce costs amid falling sales and growing pressure on profits. Chief Executive Officer Ola Källenius disclosed the decision on Wednesday during a call with investors and reporters following the release of the company’s third-quarter results. He did not disclose how many jobs could be affected. Källenius said Germany accounts for about 15 per cent of the company’s sales but houses roughly two-thirds of its employees and operational structures, making cost reductions a priority.

German Carmakers Face Profit Pressure

Mercedes-Benz is facing challenges from intense competition and declining demand in China, the world’s largest car market. The company recently issued a profit warning, joining other major German carmakers, including Volkswagen and BMW. BMW plans to cut 8,000 jobs by the end of 2027 through its own voluntary redundancy programme, while Volkswagen Group aims to reduce its global workforce by 120,000 by the end of the decade across its brands. Källenius said discussions with labour representatives over further cost-cutting measures were ongoing. He added that the company would continue adjusting its operations to reflect its revenue position.

China Remains A Key Market

Despite the challenges, Mercedes-Benz has said it cannot afford to withdraw from China, where more than 100 competing carmakers are involved in an intense price war. The company recorded a nearly 30 per cent increase in third-quarter net profit to €1.52 billion, equivalent to $1.69 billion. However, overall sales declined by 4.5 per cent to €30.7 billion, largely due to a sharp downturn in China. Källenius also pointed to lower labour costs in countries including China, Hungary, Romania and the United States, highlighting the cost pressures facing German manufacturing operations.