Deep cost cuts at Daimler could result in the elimination of approximately 20,000 jobs.
According to people familiar with the matter, Daimler will decide on how many job cuts to make based on a number of factors, including acceptance rates of voluntary buyouts and efforts to outsource some IT services.
While a Daimler spokesman has declined to comment on the matter, Germany’s Manager Magazin reported on Wednesday that Daimler could ultimately cut as many as 30,000 jobs, representing approximately 10 per cent of its global workforce.
Speaking earlier this month at Daimler’s annual general meeting, chief executive Ola Kallenius said the car manufacturer needs to sharpen its expense-cutting efforts to shore up returns, Bloomberg notes. In addition, the company is reviewing its global manufacturing network to eliminate excess capacity and may sell a factory in France, and recently halted plans to expand a facility in Hungary.
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Daimler is understood to have increased its labor-cost savings target to €2 billion ($2.3 billion) up from €1.4 billion ($1.6 billion), anonymous sources familiar with the matter claim, adding that talks with union representatives are still ongoing.
The German company first announced plans to cut staff costs by €1.4 billion in late November 2019, which at the time threatened to result in the axing of at least 10,000 jobs by 2022.
At the time, it stated that “Daimler will, among other things, use natural fluctuation to reduce jobs. In addition, the possibilities for part-time retirement will be expanded and a severance program will be offered in Germany in order to reduce jobs in the administration.”
