by Chen Xiaotong

On February 27, Mercedes-Benz China addressed rumors of layoffs, confirming to Jiemian News that the company is actively restructuring its operations in response to both a challenging market and the transformation of the automotive industry. As part of this ongoing business adjustment, some positions are being restructured or eliminated.

The company emphasized that it will realign roles based on business needs, offering employees opportunities to acquire new skills while addressing redundancies. Mercedes-Benz also reassured that it will fully comply with relevant laws and regulations, and engage in transparent discussions to provide fair and legally sound compensation packages for affected employees.

Reports earlier this week indicated that Mercedes-Benz China had initiated talks with employees about layoffs, with plans to reduce its workforce by around 15%. The cuts primarily impact the sales and automotive finance divisions, particularly at Mercedes-Benz China Automobile Sales Co. and Mercedes-Benz Automotive Finance Co. The company’s R&D sector remains unaffected for now.

Laid-off employees will receive compensation of "N+9" months' salary, where "N" is the number of years of service plus one month's average salary for each year worked. Mercedes-Benz China will add two more months' pay for those who don’t find new jobs within two months, bringing the total to "N+11."

In 2023, Mercedes-Benz’s global sales dropped 3%, with China seeing the steepest decline. The company’s 2024 financial results showed a 31.9% drop in EBIT and a 4.5% revenue decline. In response, Mercedes-Benz proposed a reduced dividend and plans to repurchase up to 5 billion euros in shares over the next two years.

Looking forward, the company forecasts that 2025 revenue will slightly decline from 2024 levels, with both EBIT and free cash flow expected to drop significantly. Global sales of Mercedes-Benz vehicles are also expected to dip slightly in 2025.