Mercedes-Benz’s 40-Hour Work Week Demand Sparks Employee Backlash, Shares Fall to Fresh Low
Published on 06/27/2026 at 15:16 | Redaktion boerse-global.de
The acrimony at Mercedes-Benz’s Stuttgart headquarters is a stark measure of just how grave the cost crisis has become. Management has informed roughly 108,000 German employees that it wants to scrap the 35-hour week for a 40-hour schedule — with no increase in base pay. The proposal, laid out in an internal letter sent on Friday, is an open challenge to the workforce that the supervisory board, led by chairman Martin Brudermüller, hopes will slash labour costs.
The employee response was immediate and hostile. The works council flatly rejected the plan and promised to fight it. This comes alongside a separate measure: a so-called transformation bonus, worth 18.4% of a monthly salary and originally scheduled for July 2026, has been pushed back to 2027. Around 90,000 workers are affected by that deferral.
A Profits Squeeze That Leaves Little Room for Maneuver
The labour confrontation does not exist in a vacuum. Mercedes-Benz reported first?quarter 2026 revenue of roughly €31.6 billion, while earnings fell 17.2% from a year earlier. The full?year 2025 profit had already been nearly halved to €5.3 billion. The car division’s operating margin in the first quarter slid to 4.1%, generating just €933 million in operating profit.
External pressures are compounding the weakness at home. A profit warning from rival BMW recently rattled the entire European auto sector, while a vicious price war in China — where demand for electric vehicles has disappointed — is punishing premium manufacturers in particular. Mercedes is also grappling with high US import tariffs and a tricky model changeover.
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Technical Damage and a Muted Analyst View
The stock has taken a severe beating. On Friday it closed at €43.27, down 3.23%, after touching an intraday low of €43.01 — a new 52?week trough. Year?to?date losses have reached nearly 30%.
From a technical perspective, the chart is ugly. The relative strength index stands at 29.2, deep in oversold territory, but clear bottoming signals are absent. The 200?day moving average of €55.05 sits more than 21% above the current price, confirming the bearish trend.
Bernstein Research kept its price target at €61.00 but rates the shares only “market perform,” saying it wants to see “tangible progress” on the operating margin before upgrading.
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What Lies Ahead
Management’s cost?cutting push also involves shifting some products and administrative functions out of Germany, and negotiations with the works council are expected in the coming weeks. At the same time, the company’s multibillion?euro share buyback programme ended on 1 June, during which it repurchased roughly 38 million of its own shares. That removes a source of support for the stock.
Investors will now look to 14 July, when Mercedes holds a pre?close call to give initial indications for the second quarter. The full quarterly report lands on 28 July. Until then, the fight over working hours and labour costs will dominate headlines — and keep the pressure on a management team that must prove its turnaround plan can deliver. If demand in China continues to soften, further earnings revisions are all but certain.
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