Australia Markets closed

40,000 jobs slashed from automotive industry since January

Automotive industry faces pressured by new wave of electric cars. Source: Getty

Mercedes-Benz owner Daimler will axe at least 10,000 jobs worldwide over the next three years, as it attempts to fund the switch to electric cars.

The job cuts equate to 3 per cent of the company’s workforce, and would save over €1 billion (AU $1.6 billion) by the end of 2022, Daimler stated.

“The automotive industry is in the middle of the biggest transformation in its history,” Daimler said in a statement.

The company revealed it was making a shift towards a sustainable business strategy, which would be costly.

“The expenditure needed to achieve the CO2 targets require comprehensive measures to increase efficiency in all areas of our company,” Daimler chairman Ola Källenius stated.

“This also includes streamlining our processes and structures. This will have a negative impact on our earnings in 2020 and 2021. To remain successful in the future, we must therefore act now and significantly increase our financial strength.”

But Mercedes just the latest manufacturer among a string of many to announce cuts to its workforce.

In fact, Yahoo Finance estimates since January this year, over 40,000 jobs have been cut worldwide as manufacturers battle tough conditions and a changing automotive landscape.

Audi: 9,500 jobs gone

Last week, Audi announced it would slash 9,500 jobs at its German factories by 2025 in a bid to save €6.5 billion (AU$ 10.5 billion). 

The money would instead be used to invest in electric cars and digital technology, the company stated.

‘’The company must become lean and fit for the future, which means that some job profiles will no longer be needed and new ones will be created,” CEO Bram Schot stated.

“That is why Audi is investing systematically in future-oriented qualification measures for the employees and thus in the future of the two sites in Germany.

“In times of upheaval, we are making Audi more agile and more efficient. This will increase productivity and sustainably strengthen the competitiveness of our German plants.”

Volkswagen: At least 5,000 jobs gone

Another german carmaker, Volkswagen, announced it planned to cut between 5,000 and 7,000 jobs by 2023 in a bid to lower operating costs by €5.9 billion.

And in a recurrent theme, the job cuts, which are expected to be carried out through retirement offers, will allow the company to be “fit for the electric and digital era”.

General Motors: 4,000 jobs gone

In February, General Motors Co announced it was axing 4,000 jobs in the latest round of redundancies. 

The cuts carried on from its announcement in November, which stated that 15,000 jobs would go as a result of five North American plants shutting down.

Ford: 7,000 jobs gone

In May, Ford announced 7,000 jobs would be slashed, with 250 of those to be on Australian shores. 

By June, that number had ballooned to 12,000 jobs across Europe.

The terminations were announced as part of Ford’s restructuring plan, which is designed to save the automaker US$600 million (AU$868 million) annually.

Unsurprisingly, Ford intended to use its new funds to focus on investing in electrification, and designing new vehicles.

Renault and Fiat merger

Italian-American auto manufacturer, Fiat-Chrysler, announced a merger proposal with French automaker Renault in May this year.

The deal is intended to save the company US$5.6 billion worth of “estimated annual run rate synergies” from “the convergence of platforms, the consolidation of powertrain and electrification investment and the benefits of scale,” the company stated.

While the deal had seemingly collapsed in June, talks had reopened in late October, with France-based Renault warming to the idea.

“There are excellent arguments” for combining the automakers, French prime minister Edouard Philippe said in an interview.

Make your money work with Yahoo Finance’s daily newsletter. Sign up here and stay on top of the latest money, news and tech news.