The German car giant's net profit fell to 10.4 billion euros ($10.8 billion), down 28 percent from 2023, while revenues also slid about four percent to 145.6 billion euros.
The group said it planned to slash production costs by a tenth by 2027 as it seeks to "ensure the company's future competitiveness".
"In an increasingly uncertain world, we are taking steps to make the company leaner, faster and stronger," CEO Ola Kallenius said in a statement.
It was the latest bad news from one of the country's car titans, which are reeling from a stuttering shift to electric vehicles, fierce competition in China from local rivals and weakening demand elsewhere.
In China, Mercedes's biggest single market, sales dropped seven percent in 2024.
German manufacturers all invested heavily in China in recent decades but are facing fierce competition from local rivals.
Overall the group's sales fell four percent last year from the previous year, hit by a drop of 23-percent in sales of electric vehicles.
It was the latest evidence that the transition to EVs is stalling, a slowdown that is weighing heavily on carmakers across Europe.
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