Daimler cuts working hours by two hours

The big bang before the summer vacation was just avoided: in the Stuttgart-based car company, there was an agreement on savings in personnel costs. Layoffs are off the table.

Daimler plant in Sindelfingen

Daimler has way too many staff. Already because of the upheaval in the auto industry, there was talk of 1.4 billion euros that would have to be saved, and the pressure to save has increased significantly due to the Corona crisis. There were even redundancies for operational reasons – but the issue of layoffs is now off the table after weeks of negotiations. Further savings are made by leaving the company on a voluntary basis and by reducing working hours on a large scale.

Immediately before the start of the summer vacation in Baden-Württemberg, the negotiating partners agreed on a reduction in working hours for a large part of the workforce. From October 1st, employees in administration and production-related areas are expected to work two hours less a week, which is 5.71 percent of the usual 35-hour week. Wage compensation is not paid for this. Working hours are not reduced in production.

In addition to the reduction in working hours – which was agreed for one year – a number of other cost-saving measures were agreed, including the waiver of profit sharing for all collective bargaining employees for this year, as well as the conversion of the collectively agreed additional allowance into paid days off.

The workforce will shrink

“We would like to thank the workforce for their contribution in overcoming this crisis together,” said Labor Director Wilfried Porth in a statement on the austerity program. Works council chief Michael Brecht comments in the same announcement that a clear contribution to safeguarding employment and stabilizing the financial position of Daimler has been agreed: “Nobody should feel threatened in their existence.”

All employees of the Daimler Group in Germany are affected by the various measures. At the level of non-collective bargaining executives, Daimler CEO Ola Källenius is aiming for a substantial reduction in personnel, which is to be implemented largely through termination agreements.

The Move austerity program, which was adopted at the end of 2019 and is intended to promote the structural restructuring of the group, will also remain in place. In this way, Daimler’s workforce in Germany is expected to shrink from 170,000 to 150,000. For this type of personnel cost reduction, which is largely dependent on the voluntary nature of the employees, the group has given itself a time horizon up to the year 2025.