Mercedes-Benz initiates its largest-ever layoff, potentially affecting 30,000 people with a maximum compensation of 4.13 million.

Mercedes-Benz Can't Hold On Anymore, May Lay Off 30,000 People!

According to a report by CheDongXi on October 22, recently, foreign media reported that Mercedes-Benz (hereinafter referred to as Mercedes) is implementing its largest-ever layoff plan.

So far, about 4,000 employees have accepted the severance package and left the company. Among them, senior managers can receive a compensation of up to 500,000 euros (about 4.13 million RMB).

Foreign media reported that about 4,000 Mercedes employees have accepted the plan (Image source: Internet)

The compensation amount is designed in a gradient. In addition to being directly linked to job level and years of service, an "acceleration bonus" is also set to encourage employees to make decisions earlier.

As early as March this year, German media reported that Mercedes management sent a letter to all employees in April, encouraging them to leave voluntarily, and opened an application channel for about 40,000 employees.

At that time, Mercedes CEO Ola Källenius said that he hoped this generous severance package would encourage about 30,000 employees to leave voluntarily. Mercedes hopes to save about 5 billion euros (about 41.3 billion RMB) annually by 2027 through outsourcing decisions, not filling vacant positions, and severance pay.

Mercedes CEO Ola Källenius

01. Net profit halved in the first half of the year, sales in the Chinese market decreased by 27% year-on-year

The reason why Mercedes-Benz Group (hereinafter referred to as Mercedes) is implementing its largest-ever layoff plan is related to the severe performance pressure it is currently facing.

Currently, Mercedes has not announced the detailed performance of its third quarter in 2025. In the first half of 2025, Mercedes' revenue was 66.377 billion euros (about 547.862 billion RMB), a decrease of about 8.6% compared with 72.616 billion euros (about 599.358 billion RMB) in the same period last year.

Some financial data of Mercedes in the first half of 2025

In terms of net profit, Mercedes' net profit in the first half of 2025 was 2.688 billion euros (about 22.186 billion RMB), a year-on-year decrease of about 55.8% compared with 6.087 billion euros (about 50.241 billion RMB) in the same period last year, almost halved.

In terms of sales, Mercedes has announced its sales in the third quarter of this year. Data shows that Mercedes' passenger car sales in the third quarter of 2025 were 441,500 units, a year-on-year decrease of 12%.

Mercedes' sales in the third quarter of 2025

In the Chinese market, Mercedes' passenger car sales in the third quarter of 2025 were 125,100 units, a year-on-year decrease of 27%, the highest decline among all markets listed by Mercedes.

Mercedes' sales in different markets in the third quarter of 2025

Mathias Geisen, a member of the Mercedes board of directors in charge of marketing and sales, said that Mercedes' sales performance in the third quarter of 2025 was affected by the market environment and tariff policies, mainly affecting sales in the United States and China.

However, Mathias Geisen also mentioned that Mercedes' sales of pure-electric passenger cars increased by 22% quarter-on-quarter in the third quarter of 2025. But at the same time, it can be seen that the year-on-year growth of Mercedes' pure-electric models in the third quarter of 2025 was 0%, and the sales of 42,600 units only accounted for about 10% of Mercedes' total passenger car sales in the third quarter of 2025.

Mercedes' sales of new energy vehicles in the third quarter of 2025

From the data, it can be seen that Mercedes' revenue, net profit, and sales have all declined. In order to ensure the normal operation of the enterprise, it is not surprising to adopt the means of layoffs to "cut costs".

02. Setbacks in electrification transformation, seeking Chinese help to fight in the pure-electric market again

However, for a luxury car company like Mercedes, just "cutting costs" is definitely not enough. Electrification transformation to "increase revenue" is also an important strategy for Mercedes.

But in fact, Mercedes' electrification transformation has been under great pressure. Recently, Mercedes Chief Technology Officer Markus Schäfer confirmed in an interview with the media that Mercedes will gradually abandon the "EQ" series and use "Electric" as the new name for pure-electric products.

The "EQ" series is the name Mercedes has long used for its pure-electric models, and models such as Mercedes EQA, EQB, EQE, and EQS have been launched.

Mercedes' "EQ" series of pure-electric models

According to data from a third-party platform, the sales performance of Mercedes' EQ series is not good. In September this year, the sales of several EQ series models in the domestic market were only a few hundred units.

Mercedes' EQ series sales in September (third-party data)

Regarding the abandonment of the "EQ" series, Mercedes Chief Technology Officer Markus Schäfer explained: "We are shifting to using the name Electric. In the early stage of electric vehicle promotion a few years ago, EQ did help to highlight the difference. But as customers gradually understand the differences in power systems and the vehicles look more and more similar in appearance, this distinction of 'EQ Technology' is becoming less and less necessary."

This can be regarded as a major adjustment of Mercedes' electrification strategy. The first pure-electric model of Mercedes based on the new MMA platform, the Mercedes CLA, is named "All-New Pure-Electric CLA" in the Chinese market, and "Pure-Electric" should correspond to the name "Electric" mentioned above.

The interface of the all-new pure-electric CLA on Mercedes' official website

It is also worth noting that for the all-new Mercedes pure-electric CLA, Mercedes chose to cooperate with Chinese partners to enhance its competitiveness.

On September 25 this year, Mercedes announced a cooperation with Chinese assisted driving supplier Momenta to develop a new generation of intelligent assisted driving systems, which will be first installed on the all-new pure-electric CLA model. The system will cover highways, urban areas, and parking, realizing intelligent assisted driving functions from parking space to parking space.

Mercedes announced cooperation with Momenta

However, judging from the pre-sale price of the all-new Mercedes pure-electric CLA starting from 259,000 yuan, its official price should overlap with that of the Xiaomi SU7, which is priced from 215,900 to 299,900 yuan, and its body size is relatively close to that of the Tesla Model 3.

The all-new Mercedes pure-electric CLA

According to a third-party platform, the sales of the Xiaomi SU7 and Tesla Model 3 in September were both around 20,000 units. That is to say, the all-new Mercedes pure-electric CLA will enter a market full of strong competitors, and its competitiveness still needs time to be observed.

The sales of the Xiaomi SU7 and Tesla Model 3 in September (third-party data)

03. Conclusion: Luxury brands are in a transformation dilemma

Judging from the financial report data, sales, and the largest-ever layoff plan, Mercedes is in a transformation dilemma.

Especially in the Chinese market, Mercedes' sales performance proves that in the world's largest new energy market, the premium of "luxury brands" is being diluted by the electrification and intelligent experience of Chinese car companies.

At the same time, combined with Porsche's recent announcement of replacing its CEO and slowing down its electrification pace, it seems that luxury brands still have a long way to go in electrification transformation.

This article is from the WeChat public account "CheDongXi", author: Zhang Rui, editor: Zhi Hao, published by 36Kr with authorization.