The company said in its announcement that it would handle the job reductions "in a socially responsible manner", including the use of "natural fluctuation". Daimler has repeatedly cut its profit outlook in recent months, and said last month that the group's operating profit will be "significantly lower" than a year ago.
The electric tortilla will be done, one way or another, and while engineering jobs for internal combustion engines and other things will probably stay in the way, the big manufacturers have decided that many more eggs must be broken first.
The "slimming down of the company", as Daimler referred to the cuts in a statement, was negotiated between the management and general works council. In addition, the possibilities for part-time retirement will be expanded and a severance program will be offered in Germany in order to reduce jobs in the administration. BMW also made an announcement this week saying that its management and labor had reached an agreement on measures to cut costs by reducing bonus and other pay schemes for staff.
The measures are aimed at lowering the company's variable cost structure and improving efficiency throughout the organization.
The decision to reduce headcount was roughly outlined during the company's capital market day on November 14.
The announcement comes days after Volkswagen's luxury auto unit Audi said it would cut up to 9,500 jobs or one in ten staff by 2025, freeing up billions of euros to fund its shift towards electric vehicle production. The company was the first truck OEM to announce curtailments in production, reversing a similar 15% production increase in 2018. The company employed 304,680 staff at the end of the third quarter. Engine maker Cummins, Inc.
Daimler personnel chief Wilfried Porth told journalists the number of jobs lost would be "in the five figures". The company said that it planned to lay off some 2,000 exempt employees in the first quarter of 2020. But as we are all in the midst of a revolution of electric cars, Daimler has apparently decided that some heads should roll, and is cutting at least 10,000 jobs to facilitate the change.
Daimler's justification for the streamlining is in part due to the industry's shift to carbon emissions neutrality requiring large capital investments.
Audi said on Tuesday that the works council and the company had agreed to cut up to 9 500 jobs between now and 2025, although it would create up to 2000 new expert positions in areas such as electric mobility and digitalization.