A decision by Daimler, the German carmaker that owns Mercedes-Benz to switch to electric cars will see the company shedding at least 10,000 jobs worldwide to mobilise resources to fund the project, ABC News can report.
Daimler personnel chief, Wilfried Porth told journalists the number of jobs lost would be “in the five figures”.
Daimler explained the car industry was going through “the biggest transformation in its history,” warranting the move.
“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,” the firm said.
“Part of this programme is to reduce staff costs by around €1.4bn by the end of 2022 and, among other things, to reduce the number of management positions worldwide by 10%.”
The move by Daimler comes days after rival Audi said it would cut 9,500 of its 61,000 jobs in Germany for similar reasons.
Daimler, which has a global workforce of nearly 300,000 and factories in 17 countries, said it would reduce costs and employment “in a socially responsible manner”, including the use of “natural fluctuation”.
“In addition, the possibilities for part-time retirement will be expanded and a severance programme will be offered in Germany in order to reduce jobs in the administration,” it added.
Daimler said its plans had been agreed with the firm’s works council, which includes union representation.
German carmakers have been slow to adapt to new technological trends, including self-driving cars and electric vehicles.
At the same time, they have been suffering falling demand in China, while the trade war between Washington and Bejing has also dented growth.
Meanwhile concerns have been raised about the increasing job losses in Germany’s automobile industry as companies seek to switch to meet global demands.
The cost of investing in electric vehicles and pressure from falling sales and profits are spurring a severe overhaul of the entire industry, with 50,000 job losses announced this year so far.