Core Viewpoint - Mercedes-Benz is undergoing significant organizational adjustments in China, including a 15% workforce reduction in its financial and sales systems, primarily affecting its wholly-owned subsidiaries [2][4][5]. Group 1: Organizational Changes - The recent layoffs are part of a broader strategy to enhance efficiency and reduce costs, initiated by the introduction of new performance assessment systems in the R&D and production sectors [2][24]. - The layoffs will primarily impact employees with indefinite contracts, including long-term staff, with severance packages based on an "N+6" formula, potentially totaling up to 11 months' salary [4][5]. - The restructuring aims to streamline the sales service system, which has become overly complex and costly due to a bloated workforce [10][21]. Group 2: Market Challenges - Mercedes-Benz faces increasing competition from domestic Chinese automakers, leading to a decline in sales and profitability, with a reported 28.4% year-on-year drop in profits [5][16]. - The company's sales in China decreased by 10.2% year-on-year in the first three quarters of 2024, prompting a need for operational adjustments [19][20]. - The traditional dealership model is under pressure, with many dealers struggling financially, necessitating a reduction in the number of dealerships and associated staff [19][21]. Group 3: Strategic Focus - The company is shifting its focus from sales-driven operations to enhancing R&D capabilities, aiming to leverage local teams for product development and innovation [28][40]. - A new CEO with a financial background has been appointed to lead these changes, emphasizing the importance of improving financial performance and operational efficiency [25][26]. - Mercedes-Benz plans to invest over 14 billion yuan in the Chinese market in 2024, highlighting its commitment to local development and competitiveness in electric and smart vehicle sectors [38][39].