BERLIN -- German automaker Daimler said Friday that it plans to cut at least 10,000 jobs worldwide by the end of 2022. It plans not to fill some vacant posts and to offer severance packages in Germany to reduce administrative jobs.
The maker of Mercedes-Benz cars had said Nov. 14 that it plans to slash costs by $1.54 billion by cutting every 10th managerial position and through other measures, but didn't give details.
A statement said Daimler had agreed with its employee council on principles to slim down the company structure and the two sides will work on implementation details over the coming weeks.
The statement said the company, which employs about 300,000 people, aims to cut "thousands" of jobs worldwide over three years. Personnel chief Wilfried Porth specified that a low five-digit number of posts will go, news agency Deutsche Presse-Agentur reported.
"With the cornerstones for streamlining the company, now agreed with the works council, we can achieve this goal by the end of 2022," Porth said. "We will make the measures as socially responsible as possible."
Daimler said that, in addition to the job-cutting drive, there will be offers to employees to reduce weekly working time, while the company will extend only "very restrictively" expiring contracts for temporary administrative workers.
The terms of Daimler's existing collective-bargaining agreement, including a scheduled pay raise next year, remain unaffected by the cutbacks, the employee council said.
The Stuttgart automaker's shares fell 1.5% in Frankfurt trading Friday. The stock has climbed 12% this year to value the company at $61 billion.
The company set the scene for the cutbacks earlier this month when new Chief Executive Officer Ola Kallenius warned returns may remain depressed for the next two years. A target for 2020 of at least 4% operating return on sales at the main Mercedes cars unit disappointed investors, coming in at less than half of what French mass-market peer PSA Group generated in the first half of this year.
Kallenius said the European Union's stricter specifications on carbon dioxide emissions and the transition to more electric vehicles are squeezing Daimler's bottom line.
He said Daimler also was being hurt in the trade war between China and the United States, with new duties being placed on U.S.-built cars that are exported to China.
Automakers have unveiled plans for record investment to develop new technology to meet stricter emissions regulations in key markets. At the same time, global demand for new vehicles is softening after a decade of almost uninterrupted growth fueled by China.
Both Audi and BMW revealed plans this week for cutbacks after talks with unions. Audi plans to cull as many as 9,500 jobs in Germany, or roughly 15% of its workforce, to lift earnings by $6.6 billion. BMW hammered out a labor pact that included lower bonus payments for employees in Germany.
Information for this article was contributed by staff members of The Associated Press and by Christoph Rauwald of Bloomberg News.
Business on 11/30/2019
Print Headline: Daimler planning 10,000 job cuts