Mercedes Workers Face Choice: Longer Hours or Pay Cuts as Automaker Pushes €5 Billion Savings Plan
23.06.2026 - 09:24:37 | boerse-global.de
A 47-year-old administrative employee at Mercedes-Benz with a decade of service and a monthly gross salary of roughly €7,417 could walk away with more than €346,000 in severance. That figure illustrates the scale of the voluntary buyout programme the Stuttgart-based automaker has launched for its white-collar workforce. Around 40,000 administrative staff are eligible. The deadline runs to March 2026, though an early-bird phase offering extra incentives — such as six gross monthly salaries plus a 10% boost to the base sum — already closed in July 2025.
The programme is part of a wider cost-cutting initiative called “Next Level Performance,” which targets annual savings of €5 billion. The push comes after first-quarter 2025 net profit slumped 43% to €1.7 billion, dragged down by falling vehicle sales in China and Europe.
Two Options, No Pay Rise
While the severance offer targets administrative roles, the broader workforce faces a different kind of pressure. Supervisory board chairman Martin Brudermüller — in office since April 2024 — has publicly demanded a return to the 40-hour working week without any wage adjustment. “Work in this country has become too expensive,” he said, arguing that Germany is losing its competitive edge.
Brudermüller presented two alternatives: accept a pay cut or work longer hours for the same salary. He considers the first option politically difficult to enforce. He also advocates extending the length of working lives to shore up the social security system.
Mercedes confirmed that talks with employee representatives are under way. A decision could emerge during the next collective bargaining round for the metal and electrical industries, scheduled for autumn 2026.
Tax Change Catches Some Off Guard
Since the start of 2025, a small but significant tax modification has affected employees receiving severance payments. The so-called “fünftelregelung” — a German rule that spreads redundancy pay over five years for tax purposes, reducing the marginal rate — is no longer automatically applied by employers. Recipients must now claim it themselves through their annual tax return.
Mercedes insists its approach is socially responsible. The buyout package is described as generous, but the company also notes that the tax treatment shift adds a layer of complexity for departing staff.
AI Use Growing, But Job Cuts Not the Goal
Personnel chief Britta Seeger reported that 60% of the Mercedes workforce now uses artificial intelligence tools on a daily basis. The company aims to push that share to 70% by the end of 2026. She described AI as a productivity enhancer rather than a direct tool for headcount reduction.
Meanwhile, Brudermüller defended the group’s flexible powertrain strategy, which keeps combustion-engine models on sale well into the 2030s. That approach, combined with CEO Ola Källenius’s focus on premium vehicles across all price segments, follows a difficult 2024 when electric-car sales dropped 24%.
Stock Under Pressure, Margins Shrink
The financial strain is visible on the stock market. In June 2026, Mercedes shares traded in the €44–€48 range, a steep decline from the previous year. Analysts have trimmed price targets and flagged margin risks across the industry.
The automotive division’s margin in the first quarter of 2025 stood at 4.1%, down from 7.3% a year earlier. Mercedes must implement its cost-saving programme while respecting job guarantees that rule out compulsory redundancies in Germany until 2034 — a constraint that makes the voluntary severance offer and the working-hours debate all the more critical.
