Mercedes-Benz is currently facing significant challenges, including competition from China, U.S. tariffs, a weak dollar, and ongoing supply chain issues. As a result, the Stuttgart-based automaker’s sales and profits are shrinking, leading to a notable decline of approximately 25 percent in its stock value since the beginning of 2026.
Cost-Cutting Measures: Focus on Home Office and Working Time
In response to its financial struggles, Mercedes-Benz has announced stringent cost-cutting measures. Since late June 2026, several strategies intended to improve the company’s financial standing have emerged. A special bonus initially set for July, which would have amounted to 18.4 percent of each employee’s monthly salary, has been postponed by an entire year, affecting around 90,000 employees.
Moreover, under the leadership of CEO Ola Källenius, the automaker is considering eliminating the home office option. This could potentially revert employees to on-site work five days a week, as indicated in an internal communication from the works council.
Increased Work Hours Without Pay Raise: What Employees Can Expect
This is just the tip of the iceberg. In addition to the potential home office elimination, Mercedes-Benz is contemplating changes to the standard 35-hour workweek. Employees may find themselves required to work up to 40 hours a week but for the same pay. The company justifies this decision by citing high labor costs compared to international standards.
The overarching pressures facing the company are evident in these actions and proposals. Employees, however, are not simply accepting these austerity measures. Reports indicate that thousands of workers from both Mercedes-Benz and Volkswagen have demonstrated against these plans, which could lead to the loss of up to 100,000 jobs globally.
IG Metall Fights Back: Employees Not Paying for Management Failures
The IG Metall union has voiced strong opposition, stating that employees should not be the ones to bear the financial consequences of management failings. They emphasize that the workforce has not caused the company’s current issues; rather, they have generated billions in profits in recent years while demonstrating flexibility and adaptability amidst transformation efforts. The union has announced further protests, signaling a “hot summer” on the horizon.
Meanwhile, production setbacks are also a concern for Mercedes-Benz. Reports indicate production delays for the highly anticipated electric SUV GLC, which has been dubbed a “fate model.” After an impressive launch event in mid-May, the company now faces shortages in batteries and electrical systems.
Anticipation of Financial Report: What Lies Ahead
The overall status of Mercedes-Benz will become clearer on July 28, 2026, when the company releases its financial results for the second quarter. Given the intensified austerity measures, the outlook is far from optimistic.
This article was originally published on July 5, 2026, and has been updated to remain relevant for our readers.
