BMW to cut 8,000 jobs in Germany as AI-led restructuring takes shape

BMW is planning to cut about 8,000 jobs in Germany as part of a restructuring programme aimed at lowering costs and making the luxury carmaker more competitive, Reuters reported on Wednesday.

The job cuts came as BMW is facing sustained weak demand, tougher competition from Chinese automakers and navigating the impact of US tariffs. Reuters reported that the company had issued its third profit warning linked to weak performance in China in just over three years in June.

BMW unveiled the restructuring plan at its Capital Market Day, with artificial intelligence, leaner management structures and a revised model strategy at the centre of the effort. The company targeted an automotive EBIT margin of 3% to 5% by 2028 and aimed to return to its long-term target range of 8% to 10% by the early 2030s.

BMW planned 20% cut in management roles

BMW is planning to reduce its divisions and associated management roles by 20% by the middle of 2027, the company said. It is also planning to streamline processes across development, purchasing, production, sales and aftersales through wider use of artificial intelligence.

CEO Milan Nedeljkovic said the measures would help BMW respond to intensifying competition. Reuters reported that Nedeljkovic, who took over as CEO in May, said the plan was not simply a cost-saving programme.

BMW had also reached an agreement with its Works Council in July on changes to its personnel structure. The restructuring included a voluntary severance programme and further reductions in management layers.

BMW reshaped its model strategy

The company also revised its product portfolio to reflect differences across key markets. It planned to launch a compact electric model using Neue Klasse technology in Europe in 2028 and considered adding a larger luxury Sports Activity Vehicle above the X7 in the US.

In China, BMW planned to expand local production and development while limiting imports to higher-margin models. It targeted at least 95% of vehicles sold in China being locally manufactured and developed for Chinese customers by 2030.

BMW also considered exporting vehicles made in China to Southeast Asian markets, Reuters reported.

The company planned to reduce the number of variants across its portfolio and focus on models that offered higher long-term contribution margins. It also planned to launch the first model under the BMW Alpina brand in 2027.

Reuters reported that BMW's shares had fallen more than a third over the previous year as the company struggled with the downturn in China and broader weakness across Europe's auto industry.