Daimler plans to invest the $1.5 billion it will save due to these layoffs into producing more efficient electric vehicles by 2022.
Image used for representational purpose. (Photo: Reuters)
Luxury automaker Daimler will scrap at least 10,000 jobs worldwide, the latest in a wave of layoffs to hit the stuttering German car industry as it battles with a costly switch to electric. The Mercedes-Benz maker said it wanted to save 1.4 billion euros (USD 1.5 billion) in staff costs by the end of 2022 as it joins rivals in investing huge sums in the greener, smarter cars of the future. “The total number worldwide will be in the five-digits,” Daimler personnel chief Wilfried Porth said in a conference call about the job cull. He declined to give a more detailed breakdown. The group said in an earlier statement that “thousands” of jobs would be axed by the end of 2022, after clinching a deal with labour representatives. The cull includes slashing management jobs “by 10 per cent”, Daimler said, reportedly amounting to some 1,100 positions around the world.
“The automotive industry is in the middle of the biggest transformation in its history,” Daimler said. “The development towards CO2-neutral mobility requires large investments,” it added. Along with other manufacturers, Daimler is scrambling to get ready for tough new EU emission rules taking effect next year, forcing it to accelerate the costly shift to zero-emissions electric cars and plug-in hybrids. The group, which employs 304,000 people globally, said the job cuts would be achieved through natural turnover, early retirement schemes and severance packages. Daimler’s announcement comes as the mighty German car industry is buffeted by trade tensions, weaker Chinese demand and a darkening economic outlook.