Daimler Trucks unveil job reduction plan involving 5,000 positions - Works council shows astonishment - Daimler Truck to Evict 5,000 Employees Leaves Works Council in Astonishment
In a move aimed at navigating sluggish economic conditions and rising costs, Daimler Truck has unveiled a far-reaching restructuring plan. The strategy, which focuses on cost-cutting, workforce reductions, and strategic production shifts, is set to reshape the company's operations in Germany by 2030 [1][3][4].
**Cost-Cutting Measures**
At the heart of the plan is the 'Cost Down Europe Program,' designed to reduce costs in Europe by more than €1 billion (approximately $1.17 billion) [1][2][3]. The strategy encompasses six core cost-reduction areas, including streamlining operations, simplifying processes, and leveraging global scale to cut complexity [3]. Additionally, the company is increasing its focus on service offerings and flexible technology investments to boost margins and resilience [3].
**Job Cuts**
The restructuring will result in the loss of approximately 5,000 jobs in Germany by 2030, primarily through natural attrition, early retirement, and targeted severance packages [1][4]. The impact is felt across five German plants employing roughly 28,000 workers, with about 35,500 employees in Germany overall. Notably, the bus division is not affected by these cuts [1].
Daimler Truck is committed to minimizing layoffs by favouring voluntary measures and social dialogue [4].
**Production Shifts**
Parts of production, particularly for Mercedes-Benz trucks, will be shifted to countries with lower labor and operational costs, leveraging Daimler Truck’s global network, including facilities in countries such as China [1][2][4]. This move is intended to strengthen competitiveness in Europe and position the company for higher profitability, targeting an adjusted return on sales (ROS) of more than 12% in its industrial business by 2030 (up from 8.9% in 2024) [2][3].
**Additional Strategic Elements**
The restructuring also includes investments in both diesel and zero-emission technology, aiming to capitalize on emerging market opportunities and regulatory trends [2][3]. A new share buyback program of up to €2 billion over two years, starting in the second half of 2025, and a dividend policy with a 40-60% payout ratio of net profit have been announced [3].
The comprehensive review process, aimed at ensuring the economic viability of each area, will be conducted area by area before decisions on job cuts or shifts are made on a case-by-case basis [5][6]. Daimler Truck and the General Works Council have reached an agreement on cost savings, with the Works Council involved in the decision-making process regarding job cuts and shifts [7].
This restructuring seeks to make Daimler Truck more agile, cost-competitive, and resilient amid challenging market conditions and evolving industry demands.
The Commission, the Council, and the European Parliament will likely discuss Daimler Truck's restructuring plan, given its significant impact on job markets and potential implications for the European Union's business and finance sectors. The European Parliament, in particular, may be interested in understanding the impact on workers and the company's commitment to social dialogue during the restructuring process.
Daimler Truck's restructuring plan involves strategic cost-cutting measures, including leveraging global scale, streamlining operations, and investing in flexible technology, which could potentially attract the interest of European Union regulators focusing on competition and market efficiency. The company's ambition for an adjusted return on sales (ROS) of more than 12% and its investment in both diesel and zero-emission technology may be an area of interest for policymakers focusing on green initiatives and sustainable growth.
