Mercedes-Benz Slashes Jobs and Extends Hours as Profit Tumbles, While 1,153-HP EV SUV Awaits in the Wings

Mercedes posts 17% profit drop, cuts costs with US layoffs and German work-hour extension, while unveiling 1,153 hp electric AMG SUV to restore luxury brand momentum.

The Stuttgart-based automaker finds itself straddling two sharply contrasting realities. First-quarter net profit cratered 17% to €1.43 billion, triggering a wave of cost-cutting that includes layoffs in the US and plans to force longer working hours in Germany. Yet at the same time, the company is preparing to launch a ferocious all?electric AMG SUV packing 1,153 horsepower – a signal that the luxury crown remains the ultimate prize.

Shares ended Friday at €45.40, leaving the stock down roughly 26% since the start of the year and well below its 200?day moving average. The decline has been relentless; the distance from last year’s high of €62.30 is stark. A modest 4% bounce last week provided little comfort, and technical indicators currently suggest a neutral posture.

Management is moving aggressively to stem the financial bleeding. On Monday, the first of 72 layoffs took effect at the research facility in Long Beach, California. In Germany, chairman of the supervisory board Martin Brudermüller is pushing for a 40?hour work week across all plants, with no wage compensation for the extra hours. The possible end of home?office privileges is also on the table, all part of a drive to slash labour costs at the home base.

Production is meanwhile being shifted further abroad. The GLC model has already been moved to Tuscaloosa, and the next big bet is on Hungary. Mercedes is investing around €1 billion in its Kecskemét site, where the new small G?Class will be built. The local workforce is set to grow to 7,500 employees.

These drastic savings plans have met with fierce internal resistance. Tens of thousands of workers protested in the past week, backed by a broad alliance that includes Bosch works council chief Frank Sell. Labour representatives are now turning up the heat on management, with car rallies planned in Stuttgart throughout July – a direct prelude to the autumn wage negotiations.

On the product side, the company is charging ahead with a battery?powered halo vehicle. The upcoming AMG SUV, due to debut early next year, will feature three electric motors delivering a staggering 1,153 hp to all four wheels. A simulated gear?change system and a synthesized V8 soundtrack are designed to preserve the visceral thrill that AMG buyers expect.

Underpinning the powertrain is an 800?volt architecture derived from Formula 1, enabling ultra?fast charging. The 106?kWh high?performance battery targets a range of nearly 700 kilometres. Inside, large screens dominate, an artificial intelligence?driven operating system processes vehicle data, and a head?up display projects digital information directly onto the road. Over?the?air updates will keep the software fresh.

The SUV will go head?to?head with the electric Porsche Cayenne. But whether that technological muscle can reignite investor enthusiasm remains an open question. The stock’s persistent slide suggests the market is more focused on the mounting cost pressures and labour unrest than on a future model, no matter how powerful. For CEO Ola Källenius, convincing investors that the strategy holds together may prove as challenging as building the ultimate electric muscle car.