Apart from laying off the staff, Daimler plans to reduce staff costs by offering a lower number of hours to employees, extending temporary workers’ contracts, and being conservative in offering 40-hour contracts. The company also plans to offer severance pay in Germany to reduce jobs and meet local regulations.
Daimler’s announcement about the job cuts has Tesla written all over it. The company said, “The automotive industry is in the middle of the biggest transformation in its history. The development towards CO2-neutral mobility requires large investments, which is why Daimler announced in the middle of November that it would launch a programme to increase competitiveness, innovation and investment strength.”
Tesla’s electric vehicle revolution has forced automakers around the world to innovate. While legacy automakers are struggling, Tesla is cruising ahead with deliveries. In the US, passenger car sales fell 9.9% during the first ten months of 2019, while Tesla’s deliveries rose 56% to 139,200 units. In Germany, Tesla’s deliveries were more than 9,000 units at the same time—an increase of over 450%! Tesla Cybertruck is also turning heads with 250,000 pre-orders including orders from Dubai police.
Tightening emission regulations are also making life harder for legacy automakers. To meet the requirements, some automakers including General Motors, Ford, and Fiat Chrysler are buying emission credits from Tesla. Daimler derived 40% of its revenues from Europe where emission norms are getting even stricter. In a way, Tesla has caused Daimler’s job cuts.
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