Thousands of Daimler workers have agreed to cut their hours and give up bonuses for 2020 in order to save jobs amid the coronavirus crisis, the German automaker said Tuesday.
The owner of Mercedes-Benz was already having a hard time with restructuring set to include major job cuts before the crisis led a drop in car sales.
Daimler stated it had reached a deal with German unions that would observe administrative workers and staff in other non-factory areas such as logistics, work two hours less a week, and take a corresponding pay cut for one year starting from October 1.
Daimler, which employs almost 300,000 people globally, did not say how many workers in Germany would be affected by the deal.
Daimler’s German workers have also accepted to forego their annual profit-sharing bonus for 2020, which amounted to nearly 600 euros ($700) per person in 2019, the statement informed.
“We want to thank the workforce for their important, temporary contribution to overcoming this crisis together,” said Wilfried Porth, the Daimler’s personnel chief.
Workers’ representative Michael Brecht called the agreement “a clear contribution to securing jobs and stabilizing our financial situation”.
Daimler said in 2019 that at least 10,000 jobs would be removed as part of the group’s efforts to conserve 1.4 billion euros by 2022, mainly through voluntary redundancies and early retirement schemes.
But German media have reported that such jobs could climb as high as 20,000 as Daimler, like other automakers, faces fallout from weeks of coronavirus led lockdowns that stopped production lines and kept dealerships closed.
Last week, the company posted a loss of almost two billion euros in the second quarter of 2020 owing to the impact of the coronavirus.
Although sales began to show some recovery as countries eased lockdown measures, Daimler CEO Ola Kallenius warned that the coming “months and years will be a challenge”.