Mercedes-Benz and its subsidiaries are trimming their workforce in China by 15 per cent. As per a Bloomberg report, the sales and finance divisions of the luxury car maker—Mercedes-Benz Automobile Finance and Beijing Mercedes-Benz Sales Service—will face the maximum brunt.
The job cuts are already underway. The contracts for certain fixed-term employees have not been renewed. However, the exact strength of the workforce at Mercedes-Benz Group China is not yet known.
Recently the car manufacturer had revealed the inclusion of more petrol and diesel cars in its latest range of offerings, reducing the number of electric vehicles (EVs). This comes on the heels of the company’s efforts to cut costs.
Mercedes-Benz is not the only car maker trying to reduce its workforce in the country.
Last December, Porsche, the German luxury car maker was also reported to be preparing to trim its workforce in China by 30 per cent. It planned to eliminate some of its regular as well as contract staff amid slow sales and dipping demand for luxury cars. The laid-off employees were assured six months’ pay as severance. Porsche had reportedly sold only about 44,000 vehicles in China in the first ten months of 2024, which was 34 per cent less than its sales during the same period the year before. Given the fact that China is known to be the global leader in terms of car sales, the fact that Porsche saw a 29 per cent slump in sales during January to September in the country was concerning. Following this weak performance, the company had decided to eliminate some dealerships in China with a view to maintaining profitability in the long run and optimising the network of dealers in the country.
