Mercedes-Benz Offers “Sky-High” Exit Packages — Global Layoffs Underway, China Unaffected

Mercedes-Benz has made headlines worldwide as reports reveal it is executing the largest downsizing plan in its history, offering employees record-breaking compensation packages to encourage voluntary departures.

According to several media outlets, around 4,000 employees have already accepted severance deals, with senior managers receiving payouts of up to €500,000 (≈ RMB 4.1 million). The exit package follows a tiered compensation system tied to position and tenure, and includes a “fast-decision bonus” — potentially pushing total compensation to as high as “N + 11.”

However, Mercedes-Benz China told The Economic Observer that

“The numbers circulating online are inaccurate — the figures of 4,000 employees, ‘N + 11’ packages, or plans to cut 30,000 staff are all incorrect. The current program does not involve the Chinese market.”

Despite differing details, Mercedes-Benz has been actively optimizing its production capacity, supply chain, and workforce since early 2025. In March, internal communications encouraged employees — particularly in engineering, administration, and IT — to voluntarily apply for severance before March 2026.

CEO Ola Källenius reportedly aims to motivate about 30,000 employees to leave voluntarily, helping the automaker save around €5 billion annually by 2027 through outsourcing and attrition. Mercedes-Benz China clarified that this figure is “an overstatement.”

The move comes amid a wave of restructuring across global automakers such as GM, Ford, Volkswagen, BMW, and Stellantis, as the industry faces deep electrification transitions, tariff challenges, and tightening profit margins. Mercedes-Benz’s net profit plunged 55.8% in H1 2025, underscoring the urgency of transformation.

At the same time, the company is doubling down on EV and digital innovation. Investor filings from August reveal plans to roll out a full lineup of next-generation models over the next two years — spanning entry-level to luxury. In China, Mercedes will launch multiple market-tailored vehicles between 2025 and 2027, developed locally and integrated with China-exclusive smart cockpit and driving systems, in partnership with local tech leaders like Momenta.

Meanwhile, the broader German auto industry is undergoing a structural reset: Volkswagen aims to cut 35,000 jobs by 2030, Bosch will reduce 13,000 positions, and ZF Friedrichshafen announced plans to trim 7,600 drivetrain roles.

The age of the electric car isn’t just changing vehicles — it’s reshaping the entire workforce landscape.