Mercedes-Benz’s parent company, Daimler, has announced that it will be slashing up to 15,000 jobs – according to German newspaper Handelsblatt – as the company pivots from traditional internal combustion engines to electric vehicles. The electrification initiative is also part of the EU’s move on cracking down on carbon emissions.
While axing 15,000 jobs is something no employers ever wants to announce, Daimler will not be putting workers out immediately but by the end of 2022. The move is said to also include the loss of 10 percent of all management jobs which is believed to be around 1,100 employees, using voluntary measures such as early retirement and attrition. The result? Daimler is projected to save in excess of EUR 1.4 billion (AU$2.26b).
Furthermore, the company is also trying to recoup the losses it took on in the form of fines. Yes, Volkswagen AG isn’t the only one who was hurt by the sale of diesel cars which did not meet emissions regulations. According to a report by Autocar, Daimler paid out £750 million (AU$1.45 billion) to regulators after admitting that 700,000 diesel cars it sold worldwide did not meet emissions regulations.
However, Ola Källenius, chairman of the board of management of Daimler AG and Mercedes-Benz AG, had this to say about the 2019 Annual Report, “While our results in 2019 reflect ongoing strong customer demand for our attractive products, we cannot be satisfied with our bottom line. Above all, material adjustments affected our financial results last year. The future of the Daimler Group lies in CO2-neutral mobility as well as in consistent digitization, leveraging its full potential in our products and our processes. To achieve that, we have substantially ramped up our investments into new technologies. We are determined to materialize our technological leadership and at the same time to significantly improve profitability. To this end, measures to cut costs and to increase cash flows are necessary. In 2019, we defined them and we have started executing. We will take the necessary actions to enhance our financial strength as the basis for our future strategy.”
Finally, Daimler isn’t just cutting jobs as part of its loss recuperation exercise but Mercedes-Benz will also be axing several models from its lineup. While the new S-Class is incoming, the range will not see Coupe and Cabriolet versions this generation but rather numerous more electrified variants. The fat trimming continues with the axing of the X-Class pickup truck at the end of May, and (some say) the merging of the CLS and AMG GT 4-Door Coupe into one electric coupe model. Even the future of the B-Class is uncertain.
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