The board of Mercedes-Benz has asked its workforce to increase weekly working hours without any change to their current salaries. Management has also decided to suspend the traditional summer bonus payment.
The move is part of an urgent cost-cutting program aimed at restoring profitability across the entire group. Ola Källenius, CEO of Mercedes-Benz, sent an internal memo to employees stating that hourly costs must be reduced in all departments, including development, sales, administration and production.
„Hourly costs must come down, this concerns development, sales, administration and production. We simply have to work more for the same hourly rate across all departments” – wrote Ola Källenius, CEO of Mercedes-Benz.
According to Reuters, the company has also decided to postpone the traditional one-off holiday bonus – equivalent to 18.4 percent of a monthly salary – to next year. This is described as an unprecedented step in the company’s history.
Cost pressures and shifting production
The group has already announced that part of its administrative work and some production will be relocated from Germany to locations with lower costs. The works council reacted with shock and published a statement opposing the burden placed on employees due to loss of competitiveness, declining sales and shrinking margins.
In 2025, Mercedes-Benz Group reported consolidated revenues of €132.2 billion and produced 2.16 million vehicles, of which 1.8 million were passenger cars. The company blames weaker sales in China, additional charges and tariffs on cars sold in the U.S., and near-halt of deliveries to customers in the Gulf states for the current crisis.
Avoiding layoffs or following Volkswagen’s path?
Management argues that these preemptive measures are intended to protect the group from having to resort to layoffs and factory closures, which have recently been announced by rival Volkswagen. The works council, however, questions whether employee concessions are the right way to solve problems rooted in market shifts and strategic missteps.
„We oppose burdening workers with problems caused by loss of competitiveness and falling margins” – stated the works council in a published communiqué.
The situation at Mercedes-Benz highlights the growing pressure on German automakers to adapt quickly to global market changes. Rising competition from Chinese electric vehicle makers, trade tensions and changing consumer preferences are reshaping the industry landscape.
Źródło: WNP.PL, Fot. Matti Blume / wikimedia commons
