Mercedes-Benz is implementing job cuts in China as part of its strategy to reduce workforce costs by 25% by 2027, aiming to streamline operations in its largest market. This move comes after the German luxury carmaker announced additional global cost-cutting measures and warned that earnings for 2025 would be significantly impacted by fierce price competition in China and increasing global trade tensions.
According to a source familiar with the matter, Mercedes informed employees at its sales and finance subsidiaries in China that 10% to 15% of the workforce in these units would be laid off. Similar reductions are planned for other departments, including IT services and legal teams, later this year. The company employs around 5,000 people in China, with 2,000 working in the research and development division, which will remain unaffected by the job cuts.
Despite these reductions, Mercedes-Benz is doubling down on its operations in China, seeking to improve the competitiveness of its products by forming more partnerships with local suppliers. Additionally, the company plans to localize more production in both China and the United States to shield itself from escalating trade tensions between the two largest economies.
The company, like many other foreign automakers, has struggled in recent years to maintain sales in China, particularly in the competitive electric vehicle and hybrid markets, where local players such as BYD have gained significant ground.
