Mercedes-Benz Expands Buyout Offer to Senior Ranks as Citi Flags a Harder Second Half

Mercedes-Benz will relaunch voluntary severance in December, extending buyouts to senior executives for the first time as it targets indirect roles.

Mercedes-Benz is widening its cost-cutting net beyond the factory floor. The Stuttgart automaker will relaunch its voluntary severance program for employees in indirect functions starting in December, and for the first time the offer will extend to senior executives — a group that had previously been spared. The company declined to specify a headcount target for the planned reductions.

The buyout package is aimed squarely at white-collar roles, covering employees under collective agreements as well as parts of the management tier. Assembly-line production remains excluded, and any departure requires agreement from both sides.

A Voluntary Exit, Backed by a Firmer Office Mandate

The severance push comes with a parallel tightening of working conditions. Mercedes-Benz has terminated its existing group works agreement on mobile working, according to a Reuters report. Under the replacement framework, managers would be able to require staff on site for as many as four days a week. The new rule is expected to take effect on January 1, 2027, though local works council bodies have yet to sign off.

Management has been blunt about why the cost base needs to shrink. At a September works meeting, production chief Michael Schiebe raised the prospect of closing one German assembly plant and one German powertrain facility if costs cannot be brought down on a sustainable basis. No formal closure decision has been made, and the works council has pushed back on the warning. The expanded buyout program is designed to attack costs outside the plants, letting the company trim payroll in a socially acceptable way without touching core manufacturing.

Citi Keeps a Neutral Stance

Analysts see a difficult stretch ahead regardless. Citi adjusted its expectations for the DAX-listed group while leaving its rating at "Neutral," pointing to mounting earnings pressure facing European automakers in the second half of 2026.

The equity has felt that pressure. In recent trading the stock added 1.2% to reach EUR 40.38, yet it remains down 33% since the start of the year. It had closed at EUR 39.90 on Friday, with a year-to-date decline of 34% at that point.

Paris Premieres and a Solid-State Battery Tie-Up

Product news has continued to flow even as the savings drive intensifies. Mercedes-Benz has announced several debuts for the Paris Motor Show, running October 12–18, including the new GLA, the GLE, a new S-Class and the fully electric VLE concept. Sporty additions such as the Mercedes-AMG CLA 45 and the Mercedes-AMG GT 4-door coupe will also appear, with the manufacturer using the event to demonstrate that its innovation pipeline remains full despite the cost squeeze.

On the technology front, Mercedes-Benz AG struck an arrangement with ProLogium Holding Inc. covering joint testing and secured priority access to the Taiwanese company's fourth-generation solid-state battery cells. Those cells will be evaluated for electrical and thermal performance as well as safety.

Investors get their next hard read on the financial trajectory on October 28, when the group publishes its third-quarter 2026 interim report alongside an analyst conference.