The Mercedes-Benz maker has also been hit by expensive recalls, a slowing global market and a €870 million fine in September for having sold vehicles that did not conform with legal emissions limits.
“By the end of 2022, Mercedes-Benz Cars plans to save more than 1 billion euros in personnel costs. To this end, jobs are to be reduced,” the company said in a statement.
“The expanded range of plug-in hybrids and all-electric vehicles is leading to cost increases that will have a negative impact on Mercedes-Benz Cars' return on sales,” it added.
The statement did not say how many jobs would be slashed overall in the cars division – Mercedes-Benz Cars & Vans employs around 175,000 people worldwide – but they are expected to be in management and administrative roles.
The Süddeutsche Zeitung last week reported, citing an email sent to staff by the group's works council, that it would cut 1,100 management jobs worldwide.
The company said it was faced with “ongoing high investment” to conform to global emissions regulation.
Like its rivals, the Stuttgart-based firm is spending billions in the shift towards the electric, autonomous vehicles of the future.
The German car industry as a whole is confronting weaker-than-expected growth, weighed down by US-China trade conflicts and Brexit uncertainty.
The setbacks pushed Daimler into a net loss of €1.2 billion in the second quarter, its first three-month loss in 10 years.
Move towards electric
It came after US electric car pioneer Tesla announced it is to build its first European factory on the outskirts of Berlin.
Elon Musk unveiled Tesla's European touchdown at an industry event in Berlin, saying he had picked a site in Brandenburg for the factory, which is expected to bring around 7,000 jobs, although some said it would create closer to 10,000 positions.
Slated for an area southeast of the German capital, the plant “will build batteries, powertrains and vehicles, starting with Model Y” SUVs, Musk later tweeted.
Production is to start in 2021 at the earliest.