HomeAutomotive & E-MobilityMercedes-Benz Halts 18.4% Bonus for 90,000 German Staff as Profits Sink

Mercedes-Benz Halts 18.4% Bonus for 90,000 German Staff as Profits Sink

Germany’s largest premium carmaker is freezing a special contractual payment worth nearly a fifth of monthly base pay for almost its entire domestic workforce, the latest sign of mounting cost pressure in the country’s automotive sector. About 90,000 employees covered by the company’s collective wage agreement will not receive the supplemental payment in July 2026 as originally scheduled; instead, the payout is now delayed until April 2027.

The move follows

a steep decline in earnings. Mercedes-Benz Group reported that net profit fell from €10.4 billion in 2024 to €5.3 billion last year, and the downward trajectory accelerated in the first quarter of 2026 with a 17.2-percent drop compared with the same period a year earlier. Management cited weak demand in China, geopolitical tensions and persistently high energy costs as the main drivers of the slump.

Beyond the bonus freeze, the board is pressing for negotiations on lengthening the standard 35-hour working week without additional pay. The goal is to reduce personnel expenses and boost productivity at German plants, where labour costs are among the highest in the industry. Roughly 5,000 workers have already left the company under voluntary severance programmes, and internal discussions about shifting more production to lower-cost locations are ongoing.

The works council reacted sharply, calling the suspension of the bonus a “unilateral decision by the board”. The employee side argues that the company is under intense pressure but insists that any further concessions must be negotiated jointly with the IG Metall union, which has already been asked to participate in talks about working-time changes. Morale among the workforce is said to be strained.

At the Frankfurt stock exchange, Mercedes-Benz shares edged down 1.38 percent to around €44.10.

Brett Shapiro
Brett Shapirohttps://www.newscase.com/
Brett Shapiro is a co-owner of GovDocFiling. He had an entrepreneurial spirit since he was young. He started GovDocFiling, a simple resource center that takes care of the mundane, yet critical, formation documentation for any new business entity.

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