Voluntary Exit Instead of Layoffs
Automakers typically try to avoid forced reductions because they are complex, expensive, and negatively impact team morale. Mercedes-Benz offered an alternative – significant financial compensation for employees who agree to leave the company voluntarily, and this strategy appears to be yielding positive results.
Scale of the Deal
According to recent data, about 4,000 workers have accepted the offer, with some receiving up to €540,000 ($580,000) for their agreement to leave the company. Despite significant one-time payments, Mercedes expects to save billions of euros in the long term.
Who Took the Offer?
The voluntary exit program was launched in April of last year and applied to almost all categories of employees. Office workers, IT specialists, engineers, and even middle managers received offers to leave their positions.
Many of these workers have job protection guarantees until the end of 2034. The only way Mercedes could convince them to leave earlier was through such a financially attractive program.
The offers had to be so advantageous that employees simply couldn’t refuse.
According to reports, some employees also received a so-called “turbo bonus” for quickly deciding to resign. Experienced workers in such cases could expect six-figure sums.
For example, a 55-year-old team leader with thirty years of experience and a monthly salary of about €9,000 ($9,700) could receive around half a million euros or nearly $600,000 for early departure. Even employees at the peak of their careers received about €100,000 ($117,000) or more, depending on their position and length of service.
Program Participation Conditions
Between 30,000 and 40,000 employees were eligible for the program. The automaker reserves the right to reject an application if it believes that a particular employee holds a key position and their departure would harm the company. However, so far only a few applications have been rejected.
The program will run until March 2026, and the company expects more people to take advantage of it as the deadline approaches. This measure is part of a larger cost-cutting plan aimed at saving approximately five billion euros by 2027. The company faces challenges on several fronts, including a 12 percent drop in sales last quarter.
Will the staff reduction make Mercedes more resilient in today’s dynamically changing conditions? The company’s management in Stuttgart certainly hopes so.
This Mercedes strategy reflects a broader trend in the automotive industry, where companies are trying to adapt to the transition to electric vehicles and digital technologies while minimizing the social consequences for their teams. The success of such programs could serve as an example for other market players who also face the need for restructuring.