Mercedes-Benz begins layoffs in China involving sales and auto finance

The Zhitong Finance App learned that car manufacturer Mercedes-Benz has launched a layoff plan in China involving two major systems, sales and auto finance, with a layoff ratio of about 15%. The layoffs mainly target some employees of Mercedes-Benz Auto Sales Co., Ltd. and Mercedes-Benz Auto Finance Co., Ltd.

According to people familiar with the matter, the automaker has begun layoffs, including not renewing the contracts of some fixed-term employees, but the pace of layoffs has accelerated this month. They said Mercedes-Benz's plans may change, the company has yet to make a final decision on the scope of the layoffs, and the number of layoffs may be less than 15% of the total number of employees.

Mercedes' decision shows the plight foreign automakers are facing in China. Major traditional brands quickly lost their market, while local brands such as BYD won the favor of consumers with faster launch and more technical electric vehicles. Furthermore, Chinese consumers are becoming more cautious when it comes to spending money.

Mercedes said last month that sales in the Chinese market fell 7% last year.

In response to rumors such as “Mercedes-Benz China's large-scale layoffs,” Mercedes-Benz China issued a statement today saying that business consolidation or reduction will inevitably involve the work arrangements of some employees. Mercedes-Benz China will strictly abide by relevant laws and regulations, adhere to honest negotiations, a friendly and responsible attitude, and provide relevant employees with follow-up plans that are as reasonable and legal as possible.

According to the statement, Mercedes-Benz China will further apply new digital technology to enable business operations, improve operational efficiency, and streamline business processes. “We will also adjust job settings and work with employees to learn new skills according to business needs, and consolidate or eliminate redundant and repetitive jobs.”