(Reuters) – Mercedes-Benz and its subsidiaries plan to cut up to 15% of their workforce in China, Bloomberg News reported on Thursday, citing people familiar with the matter.

The job cuts will primarily impact its financing and sales units, Mercedes-Benz Automobile Finance Co and Beijing Mercedes-Benz Sales Service Co, the report added.

Mercedes-Benz has already begun job cuts, including not renewing contracts for some fixed-term staff, but the pace of layoffs has accelerated this month, Bloomberg reported.

It was not immediately clear how many employees the company had in China.

Mercedes-Benz Group China told Bloomberg that it worked with employees to adjust operations based on the competitive environment and market demands. The company did not immediately respond to a Reuters request for comment.

Last week, Mercedes-Benz announced further cost-cutting and more petrol and diesel cars than EVs in its new product range, in a bid to revive margins as it braces for a sharp drop in earnings in 2025.

Embattled European car makers and auto parts makers have announced plant closures and big layoffs as high energy and labour costs compound the effect of weak demand and competition from China.

(Reporting by Surbhi Misra in Bengaluru; Editing by Savio D’Souza)