The large-scale restructuring comes amid rising cost pressures and a slowing luxury car market.
Mercedes-Benz has begun implementing what is reportedly the largest layoff plan in its history, with around 4,000 employees having already left the company through voluntary severance agreements, according to a report from Handelsblatt.
The layoffs mainly target non-production roles, including administrative, engineering, IT, and mid-level management staff. As Mercedes employees in Germany are protected from dismissal until 2034, the company is offering generous severance packages to encourage voluntary departures.
The compensation structure varies by seniority and tenure and includes an “acceleration bonus” to incentivize early decisions.
For instance, a 55-year-old team leader with 30 years of service and a monthly salary of €9,000 ($9,720) reportedly received €540,000 ($583,000) in severance pay.
The plan, which began in April 2024 and runs through March 2026, is reportedly progressing “faster than expected.”
CEO Ola Källenius said the goal is to encourage up to 30,000 employees to leave voluntarily. By 2027, the company aims to cut costs by €5 billion ($5.4 billion), including €1 billion ($1.08 billion) from personnel reductions, through outsourcing, attrition, and restructuring.
Mercedes signaled its restructuring intent earlier this year when it introduced a “Sustainable Talent Program” in March, focusing on organizational streamlining and strengthening capabilities in core technologies.
At the same time, Mercedes reached an agreement with its general works council to extend job security guarantees until the end of 2034 and pledged to avoid compulsory layoffs for operational reasons.
HR and Labor Relations Director Sabine Kohleisen said the company is balancing cost efficiency with its social responsibilities to ensure long-term competitiveness.
The large-scale restructuring comes amid rising cost pressures and a slowing luxury car market. Mercedes plans to cut both production and fixed costs by about 10% by 2027, reducing domestic output by roughly 100,000 vehicles.
Meanwhile, the automaker continues to accelerate its electrification strategy, planning to launch 36 new models—17 of which will be fully electric—and to develop seven China-exclusive vehicles.
According to the latest data, Mercedes-Benz’s global sales reached 525,300 units in the third quarter, down 12% year-on-year and 4% quarter-on-quarter. Cumulative sales for the first nine months of 2025 totaled 1.60 million vehicles, a 9% decrease from a year earlier.
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