The owner of car manufacturer Mercedes-Benz today announced that it will cut 10,000 jobs over the next three years.
Daimler, owner of Mercedes-Benz, made the announcement amid the German automaker’s move towards greater investment in electric vehicles and slowing demand.
The staff cut represents a reduction in Daimler’s workforce of about three per cent. Additionally, Mercedes-Benz will lose 10 per cent of its management positions worldwide.
“The downturn in the global car market since the middle of 2018 has been a key force behind the slump in global manufacturing and the car sales picture is turning out a lot worse than we expected…”– Fitch chief economist, Brian Coulton
“The automotive industry is in the middle of the biggest transformation in its history,” Daimler said in its statement.
“The development towards CO2-neutral mobility requires large investments, which is why Daimler announced in the middle of November that it would launch a programme to increase competitiveness, innovation and investment strength.”
Daimler is not alone as fellow German brand Audi announced it will cut 9,500 jobs, or 10 per cent of its workforce, by 2025. BMW, another German company, reportedly also cut bonuses to its employees to avoid similar layoffs.
International ratings agency, Fitch, in a report earlier this week, said global car sales will drop by more than three million units this year due to a general downturn in the industry. This figure represents the largest decline since the recession of 2008.
“The downturn in the global car market since the middle of 2018 has been a key force behind the slump in global manufacturing and the car sales picture is turning out a lot worse than we expected back in May,” said Fitch chief economist, Brian Coulton.
The report continued that there is little chance of a rebound in 2020.