BMW announced plans to cut approximately 8,000 jobs worldwide, with most reductions coming through a voluntary severance program in Germany. According to AFP, 40,000 of BMW's roughly 85,000 permanent German employees would receive the offers from October, with production line workers spared from the cuts. The program would run through the end of next year and target administration employees while excluding production workers. The Munich-based group currently employs about 160,000 people worldwide, with 87,436 employees in Germany at the end of 2025, accounting for more than half of its total workforce. CEO Milan Nedeljkovic and works council chairman Martin Kimmich set out the measures at a staff assembly on July 29, after six weeks of negotiations between the board and BMW's works council. The company is also expected to streamline its management structure as part of a broader effort to reduce costs.
The job cuts are part of BMW's strategic response to mounting competition from Chinese electric vehicle manufacturers, which have rapidly expanded their market share through competitive pricing and technological advancements. As per The Guardian, BMW is actively adapting to profound industry shifts, including the technological transformation of the automotive industry, geopolitical uncertainties, changing market conditions and developments in China. Intense price wars in China, once one of the most profitable markets for European automotive brands, have further squeezed margins and forced manufacturers to reassess their strategies. European carmakers, including BMW, have been facing increasing pressure from Chinese EV manufacturers, with the industry also grappling with the costly transition from internal combustion engine vehicles to electric mobility and the impact of US tariffs.
The move follows similar cost-cutting initiatives by German automotive rivals, with Mercedes-Benz launching voluntary redundancy programs last year through an agreement with its works council and working to reduce per-vehicle production costs by 10% by 2027 compared with 2024, partly by shifting some production to lower-cost countries such as Hungary. Volkswagen is preparing an overhaul that could see up to 100,000 job cuts worldwide alongside plans to halve its model range by 2030 and reduce production capacity by around 10% to nine million vehicles a year. Porsche, a Volkswagen Group brand, expanded its restructuring programme targeting a 20% reduction in its workforce by 2035. The German Association of the Automotive Industry (VDA) estimates that 225,000 jobs could go from the sector by 2035, on top of about 100,000 already lost since 2019. Consultancy EY calculated that German industrial companies shed 124,000 jobs in 2025, roughly twice the 2024 figure, with the losses concentrated in carmaking.
BMW issued a shock profit warning last month, cutting its profit outlook to a margin potentially as low as one percent at its cars business, with restructuring measures expected to cost the company in the second half of 2026. The company cut its forecast operating margin for the car division to between 1 and 3%, down from 4 to 6%. Vehicle deliveries in China were already at their lowest level since 2017 and fell 30.2% year-on-year in the second quarter, with deliveries dropping 20.4% to 261,773 units over the first half. Sales in China dropped to about 626,000 vehicles in 2025 from a record 847,900 in 2021. BMW's decision to maintain petrol and diesel options for customers has helped it weather the storm better than peers, but the company is now responding to the slump in the Chinese market while simultaneously working to strengthen German site competitiveness. The redundancy program is expected to meaningfully reduce BMW's costs by 2028, with the bulk of departures coming next year.
BMW shares climbed as much as 1.9% in Frankfurt following the announcement, although the stock remains down by more than one-third so far this year. CEO Milan Nedeljkovic told employees the industry was facing "a substantial change to the rules of our industry and thus to the basis of our business model," which he attributed in part to political targets remote from the market. "Neither the protectionism nor the serious changes in the market will disappear," Nedeljkovic said. He added that BMW would merge organisational units at every management level and hand more responsibility to value-adding areas. The cost-cutting measures are expected to improve BMW's profitability from 2028 onwards, with Handelsblatt reporting annual savings of around €1 billion from that year. Finance chief Walter Mertl told a capital markets call in June that the restructuring would carry one-off charges of about €1 billion, and the source cited by AFP said this year's costs alone would probably run into the hundreds of millions. In response to competitive pressure, Volkswagen, Stellantis and Ford have teamed up with Chinese companies to stay competitive and improve manufacturing efficiency.
