On the Dash:
- BMW plans to cut about 8,000 jobs globally, mostly in Germany, through a voluntary severance program that spares production roles.Â
- The cuts follow June’s profit warning and a 30% drop in its second-quarter China sales
- The automaker joins Mercedes-Benz and Volkswagen in reducing German headcount amid rising costs and Chinese competition
BMW aims to cut about 8,000 jobs worldwide, with most of the reductions coming through a voluntary severance program in Germany, according to a person familiar with the plan cited by The Wall Street Journal. The program would run through the end of next year and target administration employees while excluding production workers. Currently, the automaker employs about 80,000 people in Germany.
The planned workforce reduction comes a month after the company cut its sales and profitability guidance, as the automaker faces fierce competition in China and other Asia-Pacific markets. The automaker has already warned in June that it would accelerate cost-cutting efforts after lowering its outlook.
Notably, BMW would join the latest of German automakers to reduce headcount as the industry faces mounting pressure from Chinese competition, a high manufacturing cost base, U.S. tariffs, and thin margins on new electric vehicles.
Earlier this year, BMW executives expressed confidence that demand in China would rebound. The company struck a more upbeat tone earlier this year, with executives voicing confidence in a recovery in China before the guidance cut in June. However, the company later lowered its guidance after Q2 vehicle sales in China fell 30%, the Journal reported.
The Middle East conflict is also weighing on the automaker’s performance more than previously expected. Elevated energy prices are driving up costs while weakening global demand for new vehicle sales.
IG Metall Bavaria (Industrial Union of Metalworkers) district leader Horst Ott responded in a statement, saying, “BMW is now responding to the collapsing market in China while working in parallel to strengthen the competitiveness of the German sites.”
BMW joins Mercedes-Benz and Volkswagen among German automakers reducing headcount this year. Mercedes-Benz launched voluntary redundancy programs last year through an agreement with its works council and is 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, meanwhile, is working through a plan to save billions of euros that includes cutting its German workforce by 50,000 jobs across brands including Audi by the end of the decade. Executives have recently warned that additional restructuring and further job cuts may be needed to compete with Chinese rivals.
