Daimler to lay off 1,500 employees at Brazil plant image

Due to a really slow demand in truck sales in Brazil, Daimler AG said it will cut another 1,500 jobs at its Sao Bernardo do Campo division.

Workers at one of the factories went on strike in response to the carmaker’s decision, while the German company’ stock went down the most in the past four years, as much as 7.1%.

A spokesman for Daimler stated that the affected employees at the factory near Sao Paolo were notified on Friday last week of the company’s decision. The truck market in Brazil has been on a steep decline since 2013 because of a weak economy, high inflation and also difficult financing conditions that were not helping drivers invest in new car registrations. For the past two years, Daimler has eliminated 3,000 jobs in Brazil, minimizing its force in the Latin America country to 11,854 employees. The company has around 280,000 people working for it across the Globe.

At the beginning of August, the German carmaker announced that it still had approximately 2,000 excess workers at its Sao Bernardo do Campo plant, which had been running at less than 60% of its capacity.

Daimler made a proposal to its workers instead of recurring to job cuts, to cut 10% of their salaries for a year, which workers refused, a spokesman for Daimler saying that negotiations with them could however resume in September.

Florian Martens, spokesman for Daimler, said that “For many months now there’s simply been a dramatic decline in truck orders. Unfortunately, we don’t expect a quick recovery of the market.”

With a reduction of 13% of its workforce in Brazil, the Stuttgart-based company had to make the obvious choice as truck sales in South America’s biggest economy plunged 44% in the first half of this year.

 

By Gabriela Florea