Daimler, the owner of Mercedes-Benz, is cutting at least 10,000 jobs around the world, making it the latest carmaker to shed workers as the industry races toward its electric future.
The German company said Friday that it needs to reduce staffing costs in order to develop clean vehicles, an imperative that is roiling the global autos industry and sparking waves of new investment in electric cars.
“The automotive industry is in the middle of the biggest transformation in its history,” Daimler said in a statement, adding that it wants to improve its competitiveness, innovation and investment strength.
Daimler (DDAIF) personnel chief Wilfried Porth told reporters that job reductions would be in the low five digits. Management positions will also be trimmed by 10%. The company employs roughly 300,000 people, nearly 60% of whom work in Germany. The changes will save €1.4 billion ($1.5 billion) by the end of 2022, Daimler said.
Traditional carmakers around the world are ripping up their business models in the hope of adapting to a new world in which electricity replaces gasoline and diesel. Electric cars, which have fewer parts than those powered by internal combustion engines, require fewer workers to assemble. But they cost a lot to develop.
Audi, which is owned by Volkswagen (VLKAF), said this week it will cut 9,500 jobs by 2025, or roughly 10% of its global workforce. That will free up €6 billion ($6.6 billion) over 10 years. At the same time, the maker of premium cars is creating 2,000 jobs focused on electric mobility and other new technology.
Ford (F) said in May that it would slash thousands of office jobs worldwide, following that up one month later with 12,000 more cuts as part of a major overhaul of its struggling business in Europe. Nissan (NSANF) announced in July that it would reduce its global workforce by 12,500.
The changes come amid a slump in global auto sales, which could worsen as economies around the world slow or even fall into recession. Fitch Ratings said Monday that it expects global car sales to drop by around 3.1 million this year — a sharper fall than in 2008, when the world was gripped by the financial crisis.
Carmakers are under especially intense pressure in the United Kingdom and India, where economic weakness has reduced demand for new cars and dented production. The number of vehicles produced in Britain has fallen for 16 of the past 17 months because of continued uncertainty over Brexit.
The huge scale of the required changes are forcing some companies to find partners and turning others into acquisition targets. Fiat Chrysler (FCAU) and Peugeot owner PSA Group (PUGOY) announced plans to merge last month, creating a major new force in the industry. Daimler has joined with German rival BMW (BMWYY) to form a joint venture that will develop driverless technology. Honda (HMC) has invested in General Motors’ (GM) self-driving car unit.