Thursday 14 November 2019 1:32 pm

Daimler to cut thousands of managers to pay for electric cars

Daimler, the maker of Mercedes-Benz cars, will cut a tenth of all its manager-level workers across the globe, in a bid to slash €1.4bn worth of personnel costs.

The German manufacturer said this morning the cuts came as its profit would fall significantly over the next two years because of the shift to electric vehicles.

Read more: Chinese success propels Mercedes-Benz to record third-quarter sales

Chief executive Ola Kallenius said: “The expenditure needed to achieve the [EU’s] CO2 targets require comprehensive measures to increase efficiency in all areas of our company.” 

Kallenius, who took over at the firm in May, added: “The industry is in transformation.”

“We have to do this.”

Daimler and its peers are scrambling to reduce their overall carbon emissions, ahead of strict EU rules which come in next year.

Failure to meet the requirements could result in billions of euros-worth of fines from the EU. Daimler has already warned on profit several times last year, and has spent more than €500m as it gets up to speed on electrification.

It also agreed to pay an €870m fine over claims that nearly 700,000 failed to meet emissions rules.

This morning, Kallenius said restructuring plans would include a limit on investment and research at Mercedes, as well as job cuts.

“This can get quite emotional, but there are no two ways about it,” he said.

Read more: Mercedes-Benz owner Daimler swings to loss as car demand slumps

Last week, the firm told German employees it was to cut 1,100 managers globally.

Shares fell nearly five per cent this morning, before recovering to 2.9 per cent down, valued at about €52.