Mercedes-Benz has begun implementing workforce reductions of up to 15% in China, primarily targeting its financing and sales units as the luxury automaker confronts declining performance in one of its key markets. The job cuts will mainly affect Mercedes-Benz Automobile Finance Co and Beijing Mercedes-Benz Sales Service Co, with layoffs accelerating this month, Bloomberg News reported today, citing people familiar with the matter.
The timing of these layoffs is notable as they come just days before China’s annual “Two Sessions” political meetings are set to begin on March 4, where employment will be a central focus. During these high-profile governmental gatherings, Premier Li Qiang is expected to present the Government Work Report outlining economic priorities, including job creation targets. Last year, Beijing set targets of 12 million new urban jobs with an unemployment rate of 5.5%, and similar figures are anticipated for 2025.
According to Chinese media sources, employees impacted by the cuts will receive compensation of N+9, meaning their standard severance plus nine months of additional pay. If they do not secure new employment within two months, they may also receive salaries for March and April. The workforce reduction follows Mercedes-Benz’s recent financial report revealing a 28% YoY decline in net profit to 10.4 billion euros ($10.9 billion). During the financial report meeting, Mercedes-Benz Group CEO Ola Källenius said the company is implementing measures to make the company “faster, leaner and stronger.” The German luxury carmaker joins other legacy automotive manufacturers who have announced plant closures and layoffs as they struggle with high energy and labor costs, weak demand, and intensifying competition from Chinese manufacturers
Jing Daily
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