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Mercedes-Benz is reportedly planning to reduce labor costs in Germany by as much as €800 million as the luxury automaker explores measures to lower expenses across its domestic operations.
German business publication WirtschaftsWoche reported on Thursday that the Mercedes-Benz cost-cutting plan could involve significant changes to employee compensation and working conditions. The report cited three people familiar with the discussions.
Among the measures being considered is an increase in employee working hours, which could allow Mercedes-Benz to improve productivity without proportionally raising labor expenses. The automaker is also examining potential reductions or the complete elimination of vacation bonuses and Christmas bonuses, according to the report.
Mercedes-Benz may additionally seek to suspend certain special payments currently provided to workers. Together, the proposed measures could generate labor cost savings of up to €800 million in Germany.
However, the company cannot unilaterally implement changes affecting existing working conditions. Any adjustments would require negotiations with IG Metall, the powerful German metalworkers’ union that represents employees across the country’s automotive and industrial sectors.
The potential cuts highlight Mercedes-Benz’s efforts to control costs in Germany, where major automakers face pressure to maintain profitability while managing substantial labor and manufacturing expenses. The automotive industry is also navigating broader changes as manufacturers invest heavily in new technologies and adapt their operations to evolving market conditions.
The WirtschaftsWoche report did not indicate whether Mercedes-Benz has reached a final decision on any of the proposed measures or provide a timeline for potential implementation. Negotiations with labor representatives would be a key step before changes to working hours, bonuses or other employee benefits could take effect.
If implemented, the savings initiative would represent a significant reduction in Mercedes-Benz’s German labor expenses and could affect employee compensation packages. The final scope of the plan will depend on discussions between company management and IG Metall.
