Daimler’s (DAI.DE) Truck division is on a path to cut costs in Europe by about €550 million ($595 million) by the end of 2022. The truck maker made the announcement on Tuesday as part of its financial year-end earnings results.

While Daimler Trucks first announced the news that it would be cutting both variable and fixed cost in November 2019, the company said it still sees a further “need for action.” Under its plan, STREAM 2, the company plans to reduce employee-related costs by €300 million euros ($324 million) by 2022 with another €250 million ($270 million) to be cut in above the workforce measures within the same timeframe.

The cost-cutting initiative comes as Daimler Trucks reported solid year-end financials. Its operating profit was €2.5 billion ($2.7 billion), which it said was the third most successful in its truck division’s history, despite a decline in market sales. Total revenue for the company was €40.2 billion ($43.5 billion), up 38.3% over last year.

Daimler Truck saw demand decline in North America, Europe, and Japan at the end of 2019 by 6% to 488,500 units. The company said it is expecting further normalization of demand with decreases in North American truck sales and weak demand in the EU, the U.K., Switzerland, and Norway as well as a slight decline in demand in Japan.

“2019 was a solid year for Daimler Trucks,” Martin Daum, chairman of the Board at Daimler Truck AG, said in a statement. “We achieved a good result of 2.5 billion euros. We responded to the economic headwind in key regions and adjusted our production. We want to and will permanently cut our costs. This is why we have intensified our efficiency measures.

“We will continue to lead the transformation in our trade. The earnings power for extensive investments in future technologies is the key to success. This is how we can achieve a sustainable transformation to emission-free, automated and connected transportation of the future,” he added.

Daimler Trucks has committed to spending €1.7 billion ($1.8 billion) annually in 2020 and 2021 on enhanced truck technologies, including electric and self-driving trucks.

Shares of Daimler stock were down 2.76% as of 1:31 p.m. EST on Tuesday.

Daimler Trucks
Daimler Trucks is looking to cut costs in Europe by about $600 million by the end of 2022. Daimler Trucks
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