Compiled By: Malami Haruna Dogon daji
28 OCTOBER, 2026
Mercedes-Benz will restart a voluntary redundancy programme in Germany from December as it seeks deeper cost cuts amid weak demand and fierce competition in China. The company has not said how many jobs may go.
Chief executive Ola Källenius said on Wednesday that Mercedes would relaunch the severance programme for indirect staff in Germany. He said the move was intended to reduce the company’s fixed costs further.
The announcement came after Mercedes lowered its outlook for 2026 profitability, citing a difficult Chinese market and higher material costs. The company now expects core profit for 2026 to be broadly level with 2025’s €5.8 billion.
Mercedes is also in discussions with trade unions over additional cost-cutting measures. Neither the company nor the unions has announced an agreed package or a target number of redundancies.
The pressure is particularly acute in China, the world’s largest car market. Mercedes’ vehicle sales there fell 31% year-on-year in the third quarter, according to company results reported by The Irish Times.
The German carmaker faces growing competition from domestic Chinese manufacturers, many of which offer advanced electric and technology-heavy vehicles at lower prices. Källenius said conditions in China had deteriorated beyond the company’s earlier expectations.
Mercedes’ third-quarter revenue fell 4.5% to €30.7 billion, while adjusted group operating profit declined 15%, according to the company’s results.
The company is responding by cutting costs, localising more of its supply chain in China and expanding production in lower-cost countries such as Hungary.
Källenius said Germany represents about 15% of Mercedes’ sales but accounts for about two-thirds of its employees and corporate structures. That imbalance is central to the company’s push to reduce fixed costs at home.
The new programme follows an earlier voluntary redundancy round, for which Mercedes booked about €1.8 billion in provisions in 2025. The company said the new programme would follow similar principles, with most of its financial impact expected in 2027.
The development matters beyond Germany. It shows how Chinese competition and changing demand are forcing established global carmakers to rethink where they build vehicles, how they price them and how they manage their workforces. For African markets, including Nigeria, the outcome could influence vehicle prices, import patterns and the competitiveness of locally assembled models.
Mercedes has not announced compulsory redundancies or a final restructuring target. Workers, unions and investors should follow the company’s official disclosures and the outcome of negotiations with employee representatives.
