Competition from China, US tariffs, a weak dollar – and now delivery problems. Things are currently not going well at the Stuttgart car manufacturer Mercedes-Benz. Sales and profits are shrinking. The stock market has recorded a decline of around 25 percent since the beginning of 2026.
Mercedes-Benz tightens austerity measures
The consequence: Mercedes-Benz is tightening its austerity measures. Since the end of June 2026, measures that the group wants to implement or are at least examining have repeatedly become public. A special payment that was actually planned for July – at least 18.4 percent of the respective monthly salary – was postponed by a year. 90,000 employees are affected, as the SWR writes.
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In addition, the car manufacturer led by CEO Ola Källenius would like to delete the home office option. The return to attendance on five working days per week is currently being examined, as stated in an internal letter from the works council to the employees.
More work for the same money
And that’s not all. Because at Mercedes-Benz the 35-hour week should also be available. In the future, according to the plan, employees could have to work up to 40 hours – but for the same money. According to the group, the reason is that labor costs are too high in international comparison.
According to the general works council, the measures and considerations show how high the pressure is now on the company. The employees, on the other hand, do not want to accept the austerity measures so easily, as heise.de reports. Thousands of employees at Mercedes and Volkswagen, where up to 100,000 jobs could be lost worldwide, demonstrated against the plans on Friday, July 3, 2026.
IG Metall protests against measures
The employees are not prepared to “pay the price for the managerial failure,” said IG Metall. The employees did not cause the companies’ current problems. Instead, in recent years they have “earned billions, supported the transformation and repeatedly demonstrated flexibility.” IG Metall announced further protests and a “hot” summer for the summer, writes Wallstreet-Online.
Meanwhile, there is also bad news for Mercedes-Benz from production. As the Handelsblatt reports, production of the GLC electric SUV, which has been proclaimed a “model of fate,” is expected to stall. After the launch was celebrated in front of a gathering of political celebrities in mid-May, batteries and on-board electrical systems are now missing.
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How things are going with the group in general will become clear on July 28, 2026. Then Mercedes-Benz presents its figures for the past second quarter. Meanwhile, the tightening of austerity measures does not bode well.
