Mercedes sells showrooms, Volkswagen lays off thousands of workers

Mercedes-Benz AG has begun the process of selling its own showrooms in Germany. This decision, part of a comprehensive transformation plan, directly affects approximately 8,000 employees and costs the company €680 million in compensation packages. At the same time, Volkswagen plans to reduce 35,000 jobs at its German plants by 2030. This is the automotive industry's response to the changing market reality and the technological breakthrough associated with electromobility. From 2025, Mercedes-Benz is consistently implementing a plan to sell approximately 80 of its own showrooms in Germany. The first transaction involved the Neu-Ulm facility, acquired by Sterne Gruppe GmbH. The new owners must meet strict criteria: proven industry expertise, financial stability, infrastructure investments, and maintaining working and employment conditions.

Mercedes intends to completely transition to an agency-based and digital sales model. This will reduce operating costs and increase business flexibility. The company has categorically ruled out speculative investors, preferring strategic partners willing to develop the business in line with the brand's values. A severance package was also agreed with the trade unions – an average of €85,000 per person. The new owners must guarantee employment until the end of 2029. The agreement excludes layoffs for economic reasons.

In December 2024, Volkswagen reached a landmark agreement with trade unions after 70 hours of negotiations. The plan calls for a gradual reduction in the number of employees by 35,000 by 2030, representing approximately 27% of total employment at the company's German plants. Voluntary redundancies have already been secured through 20,000 programs. The company is ruling out compulsory layoffs and plant closures. In return, the company plans to implement, among other measures, a salary freeze until 2027, early retirement programs, severance packages, and a transition to a four-day workweek starting in 2027. The company also plans to reduce the number of places for graduates and trainees, allowing for a natural reduction in headcount. Volkswagen estimates that the cost impact of these measures will exceed €15 billion annually. A key goal is to improve the brand's operating margin to 6.5%.

Employment crisis in the German automotive industry

According to an analysis by Ernst & Young, nearly 19,000 jobs will be lost in the German automotive industry in 2024. Research by Prognos Institut commissioned by VDA shows that the sector lost a net 46,000 jobs between 2019 and 2023. Forecasts through 2035 are even more alarming , with estimates of as many as 140,000–190,000 job losses. Workers in combustion engine production, metallurgy, and mechanical engineering are most at risk. These reductions are driven by automation, digitalization, and the transition to electric drives. At the same time, demand for IT specialists, battery engineers, and electronics engineers is growing.