Mercedes Pushes Special Payment for 90,000 Workers to 2027, Considers End of 35-Hour Week

Tens of thousands of Mercedes employees in Germany will have to wait more than a year longer than expected for an agreed bonus, as the Stuttgart-based automaker intensifies cost-cutting efforts.

The company has postponed a one-off payment equal to 18.4 percent of a monthly salary — originally scheduled for July 2026 — to April 2027. Around 90,000 of Mercedes’s 108,000 workers in Germany are affected. The so-called “transformation component” was part of previous collective bargaining agreements.

Alongside the delay, Mercedes’s board is exploring a return to the 40-hour work week without wage compensation. The current standard for much of the workforce stands at 35 hours per week.

Management argues that labour costs in Germany are too high by international standards. Although only 15 percent of Mercedes’s vehicle sales come from the domestic market, roughly two-thirds of its employees are based there. Sick leave rates at German plants, the company points out, are also significantly above the global average.

The financial pressure behind these steps is stark. In the 2025 fiscal year, Mercedes’s profit nearly halved, falling from €10.4 billion to €5.3 billion. In the first quarter of 2026, earnings dropped another 17.2 percent. The adjusted return on sales now stands at 4.1 percent.

A restructuring programme named “Next Level Performance” targets annual cost savings of around €5 billion. At the same time, Mercedes plans to invest €14 billion in research and development during 2026.

Labour Resistance

Employee representatives have pushed back sharply. Ergun Lümali, head of the group works council, called the demand for a 40-hour week counterproductive, noting that many German factories are already running below capacity.

The works council stresses that any changes to working time fall under the purview of collective bargaining partners. While the postponement of the special payment is legally permissible under existing wage agreements, council members warn it damages trust between management and staff.

In recent months, roughly 5,000 Mercedes employees have already left the company under severance packages.

Industry-Wide Squeeze

Mercedes is not alone in the adjustment. Volkswagen is reportedly considering cutting up to 100,000 positions and closing four plants, according to industry reports. Sales volumes — particularly in China — remain well below 2019 levels for many German manufacturers.

Shares in Mercedes were last trading at €44.10, having lost ground in recent sessions.

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