Mercedes-Benz exposed: Layoffs of 30,000 people

On March 23, it was reported by the German newspaper Handelsblatt that Mercedes management will send a letter to all employees in April, offering very generous severance packages for departing employees. For a middle manager working in the office, earning nearly 80,000 RMB per month and having worked at the company for at least 30 years, the severance pay could exceed 4 million RMB. Mercedes-Benz CEO Ola Källenius stated that the generous severance pay could encourage about 30,000 employees to voluntarily leave, and the relevant details have been agreed upon with the employee representative committee. If a factory worker in their 30s earns about 48,000 RMB per month, their severance pay would be slightly over 800,000 RMB. Elgon Lumarri said, "If employees do not want to leave, they do not have to. But if they choose to leave, they will receive a generous compensation." The decision to lay off some employees is related to the difficult situation the company is currently facing. Mercedes previously announced its 2024 financial report, showing an annual revenue of 145.594 billion euros (approximately 1.1 trillion RMB), a year-on-year decrease of 4.5%. The annual gross profit was 28.576 billion euros, down 19.5% year-on-year; the gross profit margin fell to 19.6%, marking the first time in four years that Mercedes' annual gross profit margin dropped below 20%. The net profit after tax was 10.409 billion euros, a significant drop of 28.4% year-on-year. The poor performance of Mercedes' financial report is closely related to the Chinese market. In 2024, Mercedes-Benz's sales in China were 683,600 units, a year-on-year decrease of 7%, making it the single market with the largest decline for Mercedes globally. Additionally, against the backdrop of the global automotive market accelerating its transition to electrification, Mercedes' electric vehicles have also failed to keep pace, with the annual delivery volume of pure electric models last year being 185,100 units, a year-on-year drop of 23%. A series of factors have forced Mercedes to contract its operations and lay off employees in the global market to reduce costs and increase efficiency. Previous Report In response to rumors of "significant layoffs at Mercedes China," Mercedes China issued a statement on February 27, stating that business integration or reduction will inevitably involve the work arrangements of some employees. Mercedes China will strictly comply with relevant laws and regulations, adhering to an open, friendly, and responsible attitude to provide affected employees with follow-up plans that are as reasonable and legal as possible. Mercedes China also stated that it will further apply new digital technologies to empower business operations, improve operational efficiency, and streamline business processes. "We will also adjust position settings based on business needs and work with employees to learn new skills, as well as integrate or reduce redundant positions."