The automotive behemoth, with a history spanning over a century, never anticipated the immense pressure that would be exerted by the emerging forces in China's automotive industry! Recently, Xiao Chai reported that Mercedes-Benz has initiated a fresh wave of layoffs in China, impacting not only the sales division but also the R&D and manufacturing sectors. Mercedes-Benz has commenced a new round of layoffs in China, with certain employees receiving compensation packages as generous as N+9! The layoffs have now extended to the R&D and manufacturing domains.

There's no need to delve deeply into the reasons behind these layoffs. With the ascent of new domestic automakers, the era of prosperity for traditional established automakers has come to an end! Data reveals that Mercedes-Benz's sales in China plummeted by 7% year-on-year in 2024, further declined by 19% in 2025, and witnessed a staggering 27% drop in the first quarter of 2026. This downward trend is mirrored globally, with financial reports indicating that Mercedes-Benz's net profit tumbled from €10.4 billion in 2024 to €5.3 billion in 2025, marking a nearly 50% decrease. Moreover, in the first quarter of this year, net profit also fell by 15.5% year-on-year, reaching just €1.4 billion.

On the sales front, Chinese automakers sold 811,000 vehicles in Europe in 2025, nearly doubling the previous year's figure, with their market share soaring from 3.1% to 6.1%. Among them, BYD's sales in Europe surged by 276% in 2025, with sales in Germany (Mercedes-Benz's home turf) increasing 15-fold. SAIC MG entered the top 20 European brands with 307,000 units sold, and Chinese electric vehicles' market share in Europe rose to 8% in the first two months of 2026.

In stark contrast, Mercedes-Benz experienced a 6% year-on-year decline in global sales in the first quarter of 2026, underscoring that the traditional luxury brand's advantage in electrification is rapidly being eroded by Chinese automakers' cost-effectiveness and technological prowess. Against this backdrop, cost-cutting and efficiency enhancements have become imperative for these traditional luxury brands. Today, the topic of Mercedes-Benz canceling year-end bonuses for 90,000 employees in Germany trended on social media!

The report also mentioned plans to extend the weekly 35-hour workweek to 40 hours without any additional overtime pay or compensatory benefits. Specifically, Mercedes-Benz will be compelled to withhold the annual additional bonus slated for distribution in July to approximately 90,000 employees in Germany. During economic downturns, employers have the discretion to postpone or cancel such payments.

It is estimated that this measure could result in savings exceeding €10 million. Furthermore, management intends to discuss extending working hours without providing compensatory benefits. Currently, Mercedes-Benz employees work a 35-hour week.

It is understood that Mercedes-Benz had initially planned to distribute a "transformation bonus" equivalent to 18.4% of monthly salaries to approximately 90,000 unionized employees in Germany in July 2026. However, it has now decided to postpone the full amount by nine months to April 2027. Internal documents explicitly state that if operating conditions remain sluggish, Mercedes-Benz reserves the right to cancel this bonus entirely.

Notably, according to CCTV Finance, Volkswagen Group is reportedly planning to expand its layoffs to 100,000 workers and shut down four factories in Germany, a move that could set a record for the largest restructuring in the company's history. Clearly, amid the new energy trend and the rapid ascent of Chinese automakers, traditional automakers have reached a critical juncture where they must adapt and evolve!

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