According to German media reports, company management has informed employees about a difficult financial situation and plans to review certain compensation terms. Measures under discussion include delaying part of the annual bonus payments and potentially extending the workweek without a proportional increase in salaries.
Company Tightens Cost Controls
In recent years, the automaker has faced rising costs associated with developing new models, upgrading production facilities, and transitioning to more expensive technologies. At the same time, conditions in key markets are changing: competition in the premium segment is intensifying, while demand for certain electric models remains uneven.
Against this backdrop, Mercedes is continuing its efficiency program. The company has already revised production plans, adjusted its electrification strategy, and emphasized the need to preserve the competitiveness of its German facilities. An internal letter reported by Automobilwoche and the dpa news agency indicates that the cost-cutting measures could now also affect employee working conditions.
Bonuses Could Be Paid Later
One proposed measure is the postponement of annual bonus payments that were previously scheduled to be transferred to employees in July. According to published reports, the payments were agreed upon last year. Depending on the employee's position, they may amount to as much as 18.4% of annual compensation.
The payment date could now be delayed by approximately one year. For employees, this would mean that part of their expected income would not arrive during the originally designated period. Management has linked the decision to the need to preserve liquidity and reduce the company's immediate financial burden.
Proposal to Extend the Workweek
In addition to delaying bonuses, Mercedes is considering a transition from a 35-hour workweek to a 40-hour schedule. Such a change would require negotiations with employee representatives and labor unions because it would affect collective employment conditions.
If the proposal is implemented without an increase in base pay, employees' effective hourly wages would decline. At the same time, the company could increase total working capacity without expanding its workforce. Similar measures are generally considered in the industrial sector as a way to reduce production costs, although they may create tension between management and employees.
Employee Representatives Respond
The Mercedes works council has already opposed extending working hours without additional compensation. Its representatives argue that the manufacturer's long-term stability depends not only on lower costs but also on competitive vehicles, continued investment in development, and the retention of skilled employees.
The issue is particularly important for the group because Germany's automotive industry is simultaneously undergoing a technological transformation, facing pressure from Chinese manufacturers, and dealing with rising domestic production costs. Under these conditions, employment decisions directly affect companies' ability to retain experienced personnel.
Conclusion
Mercedes-Benz is seeking to reduce costs by postponing bonus payments and potentially extending the standard workweek. Any final decision on employment conditions will depend on negotiations with employee representatives. The situation reflects a broader restructuring of the European automotive industry, where financial discipline is increasingly being combined with changes to production and workforce models.
