Mercedes-Benz China Announces Further Layoffs, Severance Reduced to N+6

[Company Update] Mercedes-Benz China has initiated its second round of layoffs this year, reducing severance packages from N+9 to N+6.

Key Developments: Layoffs Proceeding in Two Phases, Additional Cuts Planned for Year-End

A current round of layoffs targeting 10% of staff aims to reduce headcount at Beijing Mercedes-Benz Sales Service Co., Ltd. from approximately 900 employees to fewer than 600; a second round is scheduled to begin by year-end.

Critical Metrics: China Sales Decline for 17 Consecutive Months

Mercedes-Benz deliveries in China plummeted to 575,000 units in 2025, a year-over-year drop of 19.3%; Q1 2026 sales further slumped to just 111,600 units, down 27% year-over-year—significantly steeper than the global average decline.

Strategic Rationale: Reduced Compensation Reflects Mounting Cost Pressures

This round eliminates signing bonuses and transitional salary payments, lowering the maximum payout from the previous N+11 to N+6. Although still above the statutory minimum, the reduction underscores the company’s cost-cutting strategy in response to shrinking market demand.