Mercedes Cost-Cutting Sparks Protests by 90,000 German Workers Over Bonus Delays and Unpaid Overtime

Mercedes-Benz has recently announced two cost-cutting measures affecting approximately 90,000 of its employees in Germany. The first measure involves postponing the "transformation bonus," originally scheduled for payment in July 2026, to April 2027. This bonus amounts to 18.4% of an employee’s monthly salary, and the company reserves the right to cancel it entirely if financial performance deteriorates. The second measure extends the current 35-hour workweek to 40 hours, with the additional five hours unpaid and without compensatory time off—effectively requiring employees to work an extra 260 unpaid hours annually. The company stated that these measures aim to address mounting profit pressures, citing a 48.8% year-over-year decline in profits for 2025 and a 19.5% drop in sales in the Chinese market during the same period. Germany’s largest industrial union, IG Metall, strongly opposes the proposals, arguing that unpaid overtime is not an effective solution to business challenges and that companies should prioritize technological innovation over eroding employee rights. The union emphasized that the 35-hour workweek is a hard-won achievement from long-standing collective bargaining agreements in Germany’s metal and electrical industries, and unilateral changes could trigger ripple effects across the entire sector. Multiple rounds of negotiations between labor and management are already underway. Industry analysts warn that Germany’s automotive sector is currently undergoing its most intense contraction phase amid the transition to electric vehicles, and if Mercedes-Benz pushes ahead with implementing a 40-hour workweek, it could escalate labor conflicts nationwide.