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Mercedes-Benz has initiated a significant reduction in its workforce in China, with the decision taking effect from February 25 and impacting over 15% of the company’s employees in the country. This round of layoffs primarily affects the financial and business departments of the luxury carmaker.
According to a spokesperson for Mercedes-Benz China, speaking to local media, the decision to downsize is part of a plan to adjust operations amid financial challenges. “These adjustments include optimizing and streamlining business processes and organizational structures to maintain agility, flexibility, and improve operational efficiency,” the spokesperson said.
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The Mercedes-AMG C 43 4MATIC. Photo: Mercedes-Benz. |
The company has opted not to renew the contracts of several key personnel in its financial department. According to CarnewsChina, with local banks offering more competitive car loan options, this department has struggled to retain customers.
Mercedes-Benz is not the only car manufacturer facing such challenges. Volkswagen, Porsche, and BMW have all had to adjust their business strategies to regain market share lost to domestic auto brands such as Nio, Huawei, BYD, and Hongqi.
Last year, Porsche cut jobs after three consecutive years of declining sales. In 2023, they sold only 56,887 vehicles, a 30% drop from their sales in 2022. BMW has also chosen not to renew contracts with about 5% of its staff and is expected to make further cuts this year.
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