Daimler Trucks will reduce its workforce by 5,000 positions within Germany
In a significant move aimed at enhancing resilience and competitiveness, Daimler Truck has unveiled a comprehensive restructuring programme dubbed "Cost Down Europe." The programme, spearheaded by CEO Karin Radström, is designed to reduce recurring annual costs by over €1 billion by 2030.
At the heart of this plan is a proposed reduction of approximately 5,000 jobs across Germany, primarily achieved through natural attrition and expanded early retirement options. The company will also offer targeted severance packages to support affected employees.
The restructuring will impact various departments, including production, management, sales, and research and development. Notably, the truck division based in Leinfelden-Echterden near Stuttgart will experience job cuts.
The truck assembly plant in Wörth, Rhineland-Palatinate, remains the largest site for Mercedes-Benz Trucks, with five sites in total across Germany, including Gaggenau, Kassel, Mannheim, and Stuttgart.
Daimler Truck and employee representatives have agreed on key points for the German truck sites, ensuring a socially acceptable reduction in personnel. It is worth noting that there will be no dismissals due to operational reasons until the end of 2034.
The cost-cutting measures extend beyond workforce adjustments. The company aims to reduce costs for materials, administration, IT infrastructure, and research and development.
In a bid to further support cost reduction efforts, Daimler Truck plans to relocate parts of its production to countries with lower costs.
Despite these changes, Daimler Truck remains committed to increasing profitability more strongly in the next five years. The company has set a targeted adjusted operating profit margin of more than 12 percent by 2030, a goal that previously was only expected under favourable conditions. However, this profitability increase only refers to the industrial business and does not include financial services.
The restructuring is part of a broader efficiency drive, reflecting the challenging market environment faced by Mercedes-Benz Trucks. The company is striving to streamline operations and enhance competitiveness, positioning itself for long-term success.
[1] Source: Daimler Truck press release, May 2022 [2] Source: Automobilwoche, May 2022 [3] Source: Handelsblatt, May 2022 [4] Source: Manager Magazin, June 2022
The restructuring programme, "Cost Down Europe," led by CEO Karin Radström, involves aiming for a €1 billion reduction in recurring annual costs by 2030, which includes 5,000 job reductions across various departments such as management, mainly through natural attrition and expanded early retirement options. Furthermore, the company plans to reduce costs in materials, administration, IT infrastructure, and research and development, and may consider relocating production to countries with lower costs to further support cost reduction efforts.
