27 Nov 19

Audi & Mercedes go into survival mode

In a bid to boost profitability and stay relevant in digital EV times, Audi is cutting 9,500 jobs by 2025 and shaking up its leadership. Earlier this month, Daimler had announced similar job cuts at Mercedes-Benz.

The job cuts at Daimler should help the carmaker save more than 1 billion euros by the end of 2022. This will be achieved by reducing jobs in management and in indirect areas. Daimler will also cap investments in property, plant and equipment and in R&D at the 2019 level.

The transition to electric vehicles and the development of self-driving systems in particular cause both carmakers to go into cost-cutting mode.

In 2019, Mercedes’ EBIT margin outlook dropped to a 3 to 5% range.

The outlook at Audi is also less rosy, with global sales having falled 1.2% to 1.51 million in the first 10 months of the year. Audi is still the largest profit maker in the Volkswagen family, but the company is preparing measures to defend its position ahead of the arrival of its new CEO, Markus Duesmann, on 1 April 2020.

To that end, Audi plans to eliminate around 15% of its workforce in Germany and to streamline its operations at its two main German factories. These cuts should be achieved through attrition and voluntary measures like early retirement.

After this overhaul, Audi’s remaining 50,000 employees in Germany will have job security until 2029. Moreover, 2,000 new jobs will be created to strengthen its expertise in the fields of electrification and digital offerings.

Audi has also announced a shakeup of its senior management.

Photo: Audi headquarters, Ingolstadt

Authored by: Benjamin Uyttebroeck