New Delhi:BMW AG is offering voluntary severance packages to thousands of its workers in Germany. This comes as the brand tries to become leaner in order to compete with rivals in China. The manufacturer expects the departures in Germany to make for most of the 8,000 positions that it is looking to cut worldwide as per people familiar with the issue.
BMW is preparing a voluntary workforce reduction programme aimed at employees in research, development, planning and other corporate departments, while production-line workers will not be affected, according to people familiar with the matter. The automaker is also expected to trim its management structure as part of the wider restructuring effort.
As per media sources, the offer will go out to staff in research, development, planning and other corporate functions, with factory floor workers not being eligible. BMW is also looking to streamline its management ranks in the near term as part of the wider cuts.
The programme is set to be unveiled by CEO Milan Nedeljkovic and employee representatives during a company-wide meeting in Germany. Voluntary exits are scheduled to commence in October and continue through 2027. BMW has confirmed that it has reached an agreement with the works council on a restructuring plan in Germany, though it hasn’t disclosed additional details.
Factors that have led BMW to this positionThe cost-cutting initiative follows BMW’s recent profit warning, with the company aiming to improve its financial performance by 2028. Since taking charge in May, Nedeljkovic has been addressing many challenges. This includes weakening demand in China, BMW’s biggest single market, where growing competition from domestic brands, particularly in the EV segment, and the ongoing property market slowdown have reflected on sales.
Apart from this, BMW is also navigating the impact of geopolitical tensions in the Middle East and US tariffs. The brand recently withdrew from this year’s Paris Motor Show as part of a broader review of its priorities. It has already announced plans to intensify cost-saving measures.
At the end of last year, BMW employed 87,436 people in Germany, making up for more than half of its global workforce. This was a 2.3 per cent decline compared to the year before. Before becoming CEO, Nedeljkovic led BMW’s production division and oversaw major investments in the brand’s Neue Klasse platform. Neue Klasse is expected to strengthen BMW’s position against rivals such as Tesla and Chinese manufacturers.
BMW is expected to release detailed second-quarter financial results on Thursday.
