Daimler to cut thousands of jobs by 2022 to fund electric shift

The cull includes slashing management jobs by 10 per cent globally

Ola Kaellenius, chairman of the board of management of Daimler, speaks next to a Mercedes-Benz Vision EQS electric vehicle at an event in China. Reuters

Luxury automaker Daimler said it was scrapping "thousands" of jobs to help fund the switch to electric vehicles, in the latest layoffs to hit the stuttering German car industry.

The Mercedes-Benz maker said it wanted to save $1.5 billion in staff costs as it joins rivals in investing billions in the greener, smarter cars of the future.

“Daimler aims to cut thousands of jobs worldwide by the end of 2022,” it said in a statement after clinching a deal with labour representatives.

The cull includes slashing management jobs "by 10 per cent" around the world, Daimler added, amounting to some 1,100 positions.

"The automotive industry is in the middle of the biggest transformation in its history," Daimler said.

"The development towards CO2-neutral mobility requires large investments," it added.

Along with other manufacturers, Daimler is scrambling to get ready for tough new EU emission rules taking effect next year, forcing it to accelerate the costly shift to zero-emissions electric cars and plug-in hybrids.

The group, which employs 304,000 people globally, said the job cuts would be achieved through natural turnover, early retirement schemes and severance packages.

Daimler's announcement comes as the mighty German car industry is buffeted by trade tensions, weaker Chinese demand and a darkening economic outlook.

Other major car companies have in recent months already unveiled plans to cut some 30,000 jobs in the sector over the next years.

Germany's Audi said it wants to cut 9,500 jobs, followed by more than 5,000 each at Volkswagen and car parts supplier Continental, while Bosch aims to cut more than 2,000 roles.

US car giant Ford plans to scrap some 5,000 jobs in Germany alone.

Electric engines require fewer parts and are less complicated to assemble than internal combustion engines, needing fewer hands.

But auto bosses have said thousands of new, hi-tech jobs will also be created in the electric era to make cars more autonomous and connected.

German automotive expert Ferdinand Dudenhoeffer has said he believes the German car sector, which currently employs 800,000 people, will shed 250,000 jobs over the next decade.

A total of 125,000 new ones will be created, he predicted.

Daimler returned to profit in the third quarter and said it was expecting 2019 revenues to be "slightly above" last year's.

The group was this year hit by expensive recalls and a hefty fine for having sold diesel vehicles that did not conform to legal emissions limits.