Mercedes-Benz Cuts Workforce in China Amid Market Challenges

Mercedes-Benz (OTC:MBGAF) is reducing its workforce in China by up to 15%, according to Bloomberg News. The job cuts primarily impact Mercedes-Benz Automobile Finance Co and Beijing Mercedes-Benz Sales Service Co, with layoffs accelerating this month. The company has already begun downsizing by not renewing contracts for some fixed-term employees.

While the total number of affected employees remains unclear, Mercedes-Benz Group China stated it is adjusting operations in response to market demands and competitive pressures. The company has yet to comment on the layoffs officially.

This move follows Mercedes-Benz’s recent shift in strategy, focusing on cost-cutting and prioritizing petrol and diesel cars over EVs in its new product lineup. The German automaker aims to improve profit margins as it braces for a significant earnings decline in 2025.

European automakers face mounting challenges, including high energy and labor costs, weak demand, and growing competition from China. As a result, many industry leaders have announced plant closures and major layoffs.

Mercedes-Benz’s decision underscores the difficulties foreign automakers face in China’s competitive auto market, where local electric vehicle manufacturers are gaining ground. With increasing pressure to adapt, the company’s restructuring efforts highlight broader industry trends reshaping the global automotive landscape.