Mercedes-Benz plans to lay off 259 employees as it shifts its U.S. headquarters from New Jersey to Atlanta. The company has alerted state officials it issued pink slips to workers in Montvale, NJ who will be laid off at the end of June. The company plans to move to Georgia on July 1.

The Record newspaper reports Mercedes says 203 out of 375 employees who were offered jobs in Georgia have accepted. Mercedes spokesman Robert Moran says there are about 850 jobs in Montvale. He says the move will take place in two phases and several hundred employees will remain in New Jersey for approximately two years. CEO Steve Cannon has previously said the company will hire up to 600 in Georgia.

Mercedes announced in January that it would move its North American headquarters from New Jersey to Atlanta. State officials lured the German automaker with $40 million in incentives. A southeast headquarters is also closer to the company’s assembly plant in Alabama, and its German-built cars are brought to the U.S. through the Port of Brunswick.

Employees will work in a temporary office space, as the company builds a permanent U.S. headquarters in Sandy Springs. Ground breaking is set for early next year; the building is scheduled to open in 2018.

Tags: Mercedes-Benz