German luxury carmaker Daimler is intensifying existing cost-cutting measures and plans to cut up to 15,000 jobs, Handelsblatt newspaper reported, citing company sources.
The group had said in November that it would cut at least 10,000 jobs and reduce staff costs by around 1.4 billion euros (1.16 billion pounds) by the end of 2022, a number Handelsblatt said would be significantly exceeded.
The group plans to announce the expanded savings at its annual news conference on Tuesday, the paper said, adding that Chief Executive Ola Kaellenius would also reduce investments in loss-making projects that are not part of the core business.
With 3.34 million passenger cars and commercial vehicles delivered last year, 2019 saw a minor decrease in global sales for Daimler compared to 2018. And while the revenue was €172.7 billion ($188.6 billion at the current exchange rates), up from €167.4 billion ($182.8 billion) the prior year or an increase of 3 percent, the net profit weakened to €2.7 billion ($2.95 billion) from €7.6 billion ($8.3 billion) in 2018. Despite the challenging last 12 months, the German manufacturer proudly announced it will be handing out bonuses to its employees of up to €597 ($652) and a one-time appreciation bonus of up to €500 ($546).
Daimler explains roughly 130,000 tariff-scale employees are eligible for the bonus and they will receive it with their April pay. For comparison, last year the automaker gave its workers a bonus of €4,965 ($5,640), while the 2018 bonus was €5,700 ($6,225) based on the company’s 2017 financial results.
“We are aware that many of our colleagues had to work with high tension and under difficult conditions this past year,” Michael Brecht, Chairman of the General Works Council at Daimler, commented. “Therefore, we have jointly agreed to pay an additional one-time appreciation bonus. We are grateful for everyone’s exceptional performance and commitment.”
The annual bonus in the company is based on its annual operating profit. In 2019, the operating profit was €4.3 billion ($4.7 billion) compared to €11.1 billion ($12.12 billion) in 2018. This comparison easily explains the significantly smaller dividend for Daimler’s employees this year.
“2019 has been challenging and required particular efforts from our employees,” added Wilfried Porth, Member of the Board of Management of Daimler. “We want to honor their extraordinary commitment of the past year with a one-time appreciation bonus.”
Daimler has been giving profit-sharing bonuses to its employees since 1997.