Daimler, owner of Mercedez-Benz, announced that it will be axing 10,000 jobs to free up money for the development of clean, electric vehicles.
“The development towards CO2-neutral mobility requires large investments, which is why Daimler announced in the middle of November that it would launch a programme to increase competitiveness, innovation and investment strength,” Daimler said in a statement.
“Part of this programme is to reduce staff costs by around €1.4bn by the end of 2022 and, among other things, to reduce the number of management positions worldwide by 10%.”
There will also be offers to the workforce to reduce weekly working time. Daimler also said that it will extend expiring contracts for temporary workers in the administration “very restrictively” and will also be “very restrictive” in allowing 40-hour contracts for permanent employees.
The announcement comes just days after rival automaker Audi said it would cut 9,500 jobs for similar reasons.
According to Daimler, the automotive industry is in the middle of “the biggest transformation in its history”.
“With the key points we now agreed with the works council to streamline the company, we can achieve these goal by the end of 2022. We will make the measures as socially responsible as possible,” says Wilfried Porth, Member of the Board of Management of Daimler AG, Human Resources, Labour Director and Mercedes-Benz Vans.
Daimler said the plans had been agreed with the company’s works council.
The automotive industry is shifting toward increased electric vehicle production as demand for more environmentally friendly cars is forecast to increase sharply.
However, Germany’s car lobby, the VDA, criticised the move, warning that it would “restrict entrepreneurial activity”.