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Daimler to Cut Thousands of Jobs, Reduce Weekly Working Time

If we are to judge solely by the announcements made over the past few months by major car companies, we could easily believe another economic crisis is coming our way. Germany, for instance, one of the world’s largest economies, is increasingly hinting at such a development.
Daimler gets serious on cost cutting measures 1 photo
Photo: Daimler
After last week Audi announced it would be letting go to nearly 10,000 of its employees through various means, Daimler did the same thing, announcing on Friday, November 29, it has decided to cut “thousands of jobs worldwide by the end of 2022.”

This move was agreed with the carmaker’s General Works Council, and would lead to the company saving €1.4 billion by the end of that period ($1.5 billion).

The main tool used by Daimler to let go of its people is called natural fluctuation. That essentially means people who will retire, through whatever means, will not be replaced, at least not right away.

Secondly, Daimler will slash through management positions, shaving ten percent, and will only extend expiring contracts for temporary workers “very restrictively.”

And third, “a severance program will be offered in Germany in order to reduce jobs in the administration.”

As further cost-cutting measures, Daimler employees will be offered reduced weekly working time (and, obviously, pay), and 40-hours contracts for permanent employees will no longer be handed so lightly.

These measures come somewhat against the tide, at a time when most carmakers, including Daimler, are heavily investing in the electric vehicles of tomorrow, and at the same time reporting record revenue.

"With the key points we now agreed with the works council to streamline the company, we can achieve these goal by the end of 2022. We will make the measures as socially responsible as possible," said in a statement Wilfried Porth, Member of the Board of Management of Daimler AG, Human Resources, Labour Director and Mercedes-Benz Vans.
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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