Mercedes And Volkswagen Are Firing Employees Who Are No Longer Needed

As part of the process of transformation and savings, German companies plan to lay off a large number of workers who expect substantial severance pay, reports the daily Handelsblatt.

In the first nine months of this year alone, German companies registered on the DAX stock index spent six billion euros on restructuring programs, reports Handelsblatt.

A large part of these funds is earmarked for financing the dismissal of workers who have been employed in certain companies for a long time, and many of them are in leading positions.

The Düsseldorf-based Economic Daily cites the example of Volkswagen, which offers generous severance packages to workers in leadership positions. Thus, a 50-year-old head of a subdivision with 20 years of service and a gross salary of 9,000 euros could count on severance pay of up to 400,000 euros.

And Mercedes is planning extensive savings programs, as part of which up to 40,000 employees would be laid off by 2027. Here too, severance payments are planned in, as stated, six-figure amounts.

In all companies, there is a rule according to which those who decide to terminate the employment contract the fastest can count on the highest severance pay. At Mercedes, 4,000 employees have reportedly already accepted this offer.

The reason for this expensive layoff is, according to economists, the recession and the decrease in the net profit of companies, while firing higher-paid employees is still more profitable in the long run.

“Many companies are still laying off employees because the labor market is recovering slowly due to the weak economy,” said Klaus Wollrabe from the Ifo Institute.

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