Mercedes-Benz plans to cut up to 15% of its workforce in China, as reported by Bloomberg News. The layoffs will primarily affect the financing and sales units, namely Mercedes-Benz Automobile Finance Co and Beijing Mercedes-Benz Sales Service Co.

The company has already initiated job cuts, including non-renewal of contracts for some fixed-term staff. The pace of layoffs has accelerated this month.

Mercedes-Benz Group China has stated that it is working with employees to adjust operations based on competitive environment and market demands. The company did not immediately respond to a Reuters request for comment.

Last week, Mercedes-Benz announced additional cost-cutting measures and revealed plans for more petrol and diesel cars than electric vehicles in its new product range, aiming to boost margins as it braces for a significant drop in earnings in 2025.

European car manufacturers and auto parts makers are facing plant closures and significant layoffs due to high energy and labor costs, combined with weak demand and competition from China.