Mercedes-Benz Plans Workforce Reduction with Voluntary Severance Packages
German automaker aims to save €5 billion by 2027, offering severance packages up to €500,000.
Mercedes-Benz, the German automotive manufacturer, has announced plans to reduce its workforce as part of a broader strategy to save approximately €5 billion by the year 2027. To facilitate this reduction, the company is offering voluntary severance packages that can reach as high as €500,000 for eligible employees.
The severance program, named "Next Level Performance" (NLP), is set to commence in April 2024 and will continue until March 2026. Employees participating in the program will receive tailored severance packages based on age, salary, and years of service.
For instance, a 55-year-old team leader at Mercedes-Benz earning a gross salary of €9,000 per month with 30 years of service could expect a severance payment exceeding €500,000.
Similarly, a 45-year-old employee with 20 years of service and a gross salary of €7,500 could receive about €300,000.
The severance offer is contingent upon mutual agreement at the termination of employment.
Earlier in March, Mercedes-Benz successfully negotiated a cost-saving agreement with a labor union, which aims to balance workforce reductions with employee interests.
In a commitment made by Mercedes-Benz, the company assured that it will not terminate employees for operational reasons until at least 2035. In exchange for this assurance, employees have agreed to forgo salary increases, and their annual profit-sharing bonuses for the current year will be reduced.
This strategy appears to be part of the company's efforts to adapt to the changing automotive landscape and economic pressures.
The severance program, named "Next Level Performance" (NLP), is set to commence in April 2024 and will continue until March 2026. Employees participating in the program will receive tailored severance packages based on age, salary, and years of service.
For instance, a 55-year-old team leader at Mercedes-Benz earning a gross salary of €9,000 per month with 30 years of service could expect a severance payment exceeding €500,000.
Similarly, a 45-year-old employee with 20 years of service and a gross salary of €7,500 could receive about €300,000.
The severance offer is contingent upon mutual agreement at the termination of employment.
Earlier in March, Mercedes-Benz successfully negotiated a cost-saving agreement with a labor union, which aims to balance workforce reductions with employee interests.
In a commitment made by Mercedes-Benz, the company assured that it will not terminate employees for operational reasons until at least 2035. In exchange for this assurance, employees have agreed to forgo salary increases, and their annual profit-sharing bonuses for the current year will be reduced.
This strategy appears to be part of the company's efforts to adapt to the changing automotive landscape and economic pressures.
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