Mercedes-Benz Embarks on Cost-Cutting Measures

Mercedes-Benz is implementing a comprehensive cost-cutting strategy to boost profitability amid declining earnings and sales. The plan involves significant reductions in administrative, research, and marketing positions, while safeguarding production jobs. Production will be scaled back in Germany and increased in Hungary. The company has negotiated with the workers' council to prevent compulsory redundancies until 2035, while also reducing wage increases and bonuses. Employees will receive a one-time payment of €5,220 in 2023 as a goodwill gesture.

CEO Ola Källenius aims to make the company more competitive by optimizing material and production costs by 10% by 2027. The agreement includes a severance program and a reduction in tariff increases, with the last profit-sharing planned for 2025. This move is part of the "Next Level Performance" initiative, affecting 91,000 employees in Germany. Despite the challenges, Mercedes-Benz is gearing up to compete with emerging market players, striving to maintain its position among top-tier automotive manufacturers.