German luxury auto manufacturer Daimler AG is heightening its current cost-cutting measures and considers terminating up to 15,000 job positions, the Handelsblatt newspaper reported.
The business newspaper cited unnamed sources late Monday as saying the Mercedes-Benz owner will let go of more personnel than initially disclosed, part of the company's efforts to trim down ballooning operational costs.
Daimler announced in November that it would cut some 10,000 jobs and reduce workforce expenditures by about 1.4 billion euros by the end of 2022; a number of Handelsblatt stated would be greatly exceeded.
Daimler chief executive Ole Källenius is expected to release the carmaker's revised savings blueprint at its annual media gathering Tuesday.
In December, the company announced it would reduce its staff in the "five digits" region by 2022 in order to save around $1.5 billion from its operating costs.
If reports about the 15,000 jobs cuts were correct, Daimler would be on track to implement a new corporate structure as it adapts to an industry-wide transformation to electric vehicles.
Sources said that the German automaker and the General Works Council have agreed on important details in order to enhance the company's structure and "improve flexibility and efficiency," in reference to the company's agreement with a workers' labor union.
Daimler will cancel the manufacture of its X-Class Pickup after May this year. Handelsblatt disclosed it would further modernize its product lineup by scrapping production of the coupe and convertible and versions of the S-Class.
In the last four quarters, Daimler has released three profit warnings. In January, the carmaker reported a major slide in operating earnings for 2019.
The sources added that as discussed by the board in December 2019, Daimler is looking at reducing a low five-digit figure of jobs around the world by the end of 2022.
A Daimler company executive did not immediately comment regarding the Handelsblatt report. Sources had divulged to the German news firm that Daimler is considering a host of severance payments, early retirement plan, and partial retirement for employees whose positions the company will dissolve.
It is not clear if the 15,000 layoffs would comprise the entirety of Daimler's planned "five-figure" personnel reductions, or just a first in a series of installments.
As this developed, a group of investors from the US, European Union, and Asia filed a 900-million euro case against Daimler in a German court last January. They accused the Mercedes-Benz parent company of intentionally concealing the truth that it had installed an unauthorized emissions-cheating device.
The lawsuit alleges that Daimler did not warn investors of the dangers and the costs involved, which is a violation of capital markets law.
