German luxury car maker Mercedes-Benz has agreed to a comprehensive cost-cutting measure with its employees.
A spokeswoman said Tuesday that management and the General Engineering Commission have reached an agreement that includes saving workers’ salaries and increased worker flexibility to enable production more temporary jobs.
The company proposed a plan to drop 28% after net profit fell by 28% in 2024 due to a wider struggle in China’s major automotive industry, which has resulted in a 28% drop in sales.
“We are playing in the Auto Champions League,” CEO Ola Källenius said in a statement.
“We have to be stronger, faster, hungry,” he added. “We have to attack ourselves. That’s exactly what we are doing.”
The package of measures consistent with employees includes voluntary layoffs for workers who do not participate in production.
Job Safety Guarantees excluded mandatory layoffs from the company’s 91,000 employees in Germany, which has been extended from 2029 to 2034.
The spokesman said that as previously announced, senior management, team leaders and executive committee members will not receive a pay increase in 2025.
The Stuttgart-based company is seeking to increase profitability, reducing production costs by 10% by 2027.
