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Mercedes to Axe 8,500 Jobs in Germany

News, 30 September 2005

Struggling luxury car maker Mercedes is aiming to cut up to 8,500 jobs at its German plants.

Parent company DaimlerChrysler will spend €950 million ($1.14bn; £647m) through the next twelve months to finance the voluntary layoffs, which are "unavoidable given the current market situations", says human resources chief Günther Fleig.

The Stuttgart-headquartered Mercedes group, which also owns the Smart and Maybach marques, suffered an operating loss of €954m in the first quarter of 2005 and barely eked a profit of €12m in the second.

Despite the cost of the job cuts program, the group remains upbeat in its full-year forecast, saying it still expects operating profit to increase slightly from the €5.8 billion posted in 2004.

The company, which employs around 94,000 people in Germany, has struggled with build-quality problems and fierce competition, together with big losses at Smart. Earlier this year Mercedes announced a recall of 1.3m cars for a variety of mechanical problems.

Data sourced from Wall Street Journal Online; additional content by WARC staff