Daimler seeks 1 billion euros in savings at Mercedes-Benz by slashing jobs

Stricter emissions rules are going to hit Daimler’s profits in 2020 and 2021, prompting the German automaker to seek over 1 billion euros ($1.1 billion) in savings from slashing staff expenses at its Mercedes-Benz business by the end of 2022, it stated on Thursday.

Daimler shares dropped 2.3% in early trading at 52.17 euros, the biggest decrease in Germany’s DAX, blue-chip index, which was dropped 0.3%.

Management positions will be slashed by around 10%, and the company stated it would also seek over 300 million euros from slashing personnel costs – as well as another 250 million euros in fixed costs – at its trucks business.

Daimler stated it required to sell more electric vehicles to meet stricter European Union rules which force automakers to slash carbon dioxide emissions from cars by 37.5% by 2030 compared with 2021 levels and after a 40% cut between 2007 and 2021.

The company stated it expected to achieve a return on sales from operating activities at Mercedes-Benz Cars & Vans of no less than 4% in 2020 and at least 6% in 2022.

Mercedes-Benz expects car sales to increase by around 3% in 2020 but stated that potential trade tariffs and Brexit could depress the return on sales by about 1%.

Previously this year, Daimler had stated it hoped to gain a return on sales of 3% to 5% at Mercedes-Benz Cars.