Mercedes-Benz is cutting production at its Factory 56 plant in Sindelfingen, Germany, due to falling demand for its S-Class and EQS models. For the first time, production of Mercedes-Benz S-Class models will be carried out in a single shift, and around 1,500 employees at the plant will be warned of layoffs when they return from their August holiday.

The cuts follow similar moves last year and are scheduled to begin in the fourth quarter of this year. Mercedes-Benz builds the S-Class, EQS-Class and related Maybach variants at a plant in southern Germany.

“In the fourth quarter, it is planned to transfer production at plant number 56 to a single-shift operation mode and transfer part of the employees to other production areas of the plant,” the brand’s representative told the German publication Automobilwoche.

The facility’s capacity has reportedly been idle for several months due to shrinking demand in the premium segment. Staff are expected to be transferred to Shop 46, where the E-Class and GLC models are produced.

The combined production of Mercedes-Benz’s four flagship models (S-Class, EQS and GLS) is expected to be just 33,400 units in the second quarter of 2024, down around 25% year-on-year.

Mercedes-Benz S-Class sales fell in all markets in the first half of 2024: 13.0% in China (to 10,430 units), 19% in the US (to 5,026 units) and 27% in Europe (to 10,430 units (4,249 units)). The updated S-Class is planned to be launched in 2025, but it is not yet known whether this will be enough to return Sindelfingen to two-shift operation.