Daijiworld Media Network - New Delhi
New Delhi, Jul 29: German luxury carmaker BMW has announced plans to cut several thousand jobs in Germany by the end of 2027 through a voluntary redundancy programme, becoming the latest automaker to reduce its workforce amid weakening demand, rising costs and the transition to electric vehicles.
The company said the severance programme, agreed with the works council, will mainly affect employees in its administration and development divisions, while production operations will remain unaffected.
According to reports, the workforce reduction is expected to impact around 8,000 employees in Germany. BMW currently employs about 150,000 people worldwide.
The move comes as Germany's automotive industry grapples with mounting challenges, including the costly shift to electric mobility, growing competition from Chinese manufacturers and the impact of US tariffs.
BMW joins German rivals Volkswagen and Mercedes-Benz, both of which have already announced large-scale workforce reductions as part of their restructuring plans.
Earlier this week, Porsche, a subsidiary of the Volkswagen Group, expanded its restructuring programme with plans to reduce its workforce by around 20 per cent by 2035. On Wednesday, thousands of workers protested at Audi's Neckarsulm plant against Volkswagen's restructuring plans, which have put one of the group's four German production facilities at risk of closure.
BMW, which had been regarded as relatively resilient compared to its domestic competitors, lowered its profit outlook for the current financial year in June, citing weaker-than-expected business in China, where vehicle sales have declined significantly in recent months.
Following the revised forecast, Chief Executive Milan Nedeljkovic said the company would accelerate and intensify its cost-cutting measures. Addressing employees, he said the automotive industry was undergoing fundamental changes that were reshaping BMW's business model, adding that the planned measures were necessary to strengthen the company's long-term profitability.
BMW is scheduled to announce its second-quarter financial results on Thursday.