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Investing.com -- Mercedes-Benz (OTC:MBGAF) has reached an agreement with its works council to propose buy-outs to its employees and decrease planned salary raises by 50%. The decision, announced on Tuesday, is part of a broader initiative to cut costs as the automaker strives to improve its earnings.
Mercedes-Benz has set a goal to lower production costs by 10% by 2027 and then double that reduction by 2030. This is in addition to an ongoing plan initiated in 2020 to cut costs by 20% between 2019 and 2025.
The company did not disclose the number of jobs that would be affected by this measure. However, it confirmed that production workers would not be impacted.
Furthermore, the company has dismissed the possibility of layoffs, with a commitment to extend job security assurances until the end of 2034.
During the annual results conference last month, CFO Harald Wilhelm revealed the company’s plan to outsource functions from finance and human resources to procurement. This would result in a smaller workforce, achieved by not filling positions left vacant by retiring employees and negotiating voluntary redundancies.
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