Mercedes-Benz plans job cuts to save over a billion dollars by 2022

Tougher emissions rules will hit Daimler's profits in 2020 and 2021, prompting the German carmaker to seek more than 1 billion euros ($1.1 billion) in savings from cutting staff costs at its Mercedes-Benz business by the end of 2022, it said on Thursday.

Daimler shares were down 2.3% in early trading at 52.17 euros, the biggest decline on Germany's DAX blue-chip index, which was down 0.3%.

Management positions will be cut by around 10%, and company said it would also seek more than 300 million euros from cutting personnel costs — plus another 250 million euros in fixed costs — at its trucks business.

Daimler said it needed to sell more electric vehicles to meet tougher European Union rules which force carmakers to cut carbon dioxide emissions from cars by 37.5% by 2030 compared with 2021 levels, and following a 40% cut between 2007 and 2021.

The company said it expected to achieve a return on sales from operating activities at Mercedes-Benz Cars & Vans of at least 4% in 2020 and at least 6% in 2022.

Mercedes-Benz expects car sales to grow by around 3% in 2020, but said potential trade tariffs and Brexit could depress the return on sales by up to 1%.

Earlier this year, Daimler had said it hoped to achieve a return on sales of 3% to 5% at Mercedes-Benz Cars.