Daimler AG's incoming CEO Ola Källenius is planning to cut central administration costs by 20% in a bid to reach profit margin targets, Reuters reported May 20, citing German newspaper Handelsblatt.
The plan, which is expected to be ready this summer, comes as global trade woes and ramp-up issues at factories threaten the German carmaker's profit margin outlook, the report said.
Daimler earlier said that it is expecting a slight growth in unit sales, revenue and earnings across its divisions in 2019, while forecasting a significant decrease in demand in China after suffering a 15% slump in revenue in the country during the first quarter.
Handelsblatt, which cited company sources, reportedly said that the cost-cutting plan, dubbed "Move," could save billions of euros.
These initiatives are expected to be implemented when Källenius takes over as CEO from Dieter Zetsche at the conclusion of the company's annual meeting May 22. Källenius will also lead Mercedes-Benz AG as CEO.
Reuters said Daimler declined to comment on the matter.
The report comes about a month after it was reported that Daimler is planning a €6 billion cost-saving initiative at Mercedes-Benz by 2021, a move that could affect about 10,000 jobs.
Shares of Daimler closed down €1.34, or 2.51%, at €52.02 in Frankfurt following the news.