Daimler Truck plans to eliminate 5,000 jobs for cost-saving measures - Daimler Truck is eliminating 5,000 positions.
Amidst a challenging market landscape characterized by supply chain disruptions, increased energy and freight costs, and weak demand, particularly in Europe, Daimler Truck has unveiled a comprehensive cost-cutting program named "Cost Down Europe." The objective of this initiative is to achieve recurring cost savings of over €1 billion by 2030, positioning the company for sustainable growth and improved financial outcomes.
**Key Reasons for the Cost-Cutting Program**
Daimler Truck is taking several strategic measures to enhance its profitability and competitiveness. One such move involves shifting the production of Mercedes-Benz trucks to more cost-effective locations outside Germany. This strategic shift aims to reduce production costs and increase efficiency by leveraging lower-cost countries.
Another significant factor driving the cost-cutting program is the company's ambitious target to increase its adjusted return on sales in its industrial business. Daimler Truck aims to achieve an adjusted return on sales of over 12% by 2030, up from 8.9% in 2024. This ambitious goal necessitates enhanced efficiency and reduced complexity across various areas, including materials, administration, and IT infrastructure.
**Streamlined Operations and Reduced Complexity**
The restructuring plan covers several core cost reduction areas, including materials, administration, and IT infrastructure, with the goal of simplifying operations and eliminating redundancies. The company aims to achieve this by implementing targeted severance programs and encouraging natural attrition and partial retirement, with a commitment not to make operational redundancies until the end of 2034.
**Investment in Growth Areas**
The savings from the program are expected to free up capital for investments in high-margin sectors such as zero-emission trucking, defense (which Daimler Truck aims to double by 2030), and the parts and services business.
**Job Cuts and Affected Sites**
The job cuts—approximately 5,000 positions in Germany by 2030—will affect employees at five German sites: Gaggenau, Kassel, Mannheim, Stuttgart, and Wörth. The bus segment will be excluded from these measures.
**Criticism and Future Outlook**
Michael Brecht, chairman of the works council, has criticized the planned cuts and expressed a desire for a clear growth strategy, beyond just cost-cutting. Despite this, Daimler Truck remains committed to its strategy, aiming to become more competitive in Europe and positioning itself for a sustainable future in the rapidly evolving market.
Daimler Truck, one of the world's largest commercial vehicle manufacturers, employs more than 100,000 people globally, with its headquarters located in Leinfelden-Echterdingen, near Stuttgart, Germany. The company's CEO, Karin Radström, and her management team are determined to deliver a fundamental improvement in the financial performance of Daimler Truck.
- Despite employing over 100,000 people across various EC countries, Daimler Truck, in the face of challenging market conditions, has announced a cost-cutting program primarily targeting its manufacturing industry in Europe, with the goal of achieving savings in finance and improving business outcomes.
- In an effort to increase profitability and competitiveness, Daimler Truck plans to reduce employment in Germany by approximately 5,000 positions by 2030, affecting employees in the manufacturing industry, while investing in high-margin sectors like finance and business such as zero-emission trucking, defense, and the parts and services business.
