BMW has become the latest German carmaker to announce a major restructuring programme, offering voluntary redundancy packages to thousands of employees as Europe’s automotive industry grapples with weakening demand, Chinese competition and mounting political and trade pressures.
The Munich-based manufacturer plans to reduce its global workforce by around 8,000 positions by the end of 2027, with most of the cuts expected to come from Germany through voluntary departures.
A company source told AFP that around 40,000 of BMW’s roughly 85,000 permanent employees in Germany will be eligible to receive redundancy offers from October. Factory workers will be excluded from the programme, which instead targets white-collar staff in research, development, planning and other corporate functions.
BMW confirmed it had reached an agreement with its works council on a restructuring programme. A company spokesperson told Reuters the scheme covered the administration and development divisions, with production operations excluded.
Chief executive Milan Nedeljković and works council chairman Martin Kimmich set out the measures at a staff assembly on July 29, after six weeks of negotiations. The programme is due to run from October 2026 until the end of 2027.
The company, which employs around 154,000 people worldwide, is also expected to streamline its management structure as part of a broader effort to reduce costs.
The restructuring follows a profit warning issued in June after BMW’s earnings were hit by collapsing demand in China, rising competition from domestic manufacturers such as BYD, US tariffs and continuing geopolitical uncertainty. The company cut its forecast operating margin for the car division to between 1 and 3 per cent, down from 4 to 6 per cent.
Nedeljković 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,” Nedeljković said. He added that BMW would merge organisational units at every management level and hand more responsibility to value-adding areas.
Although BMW has generally weathered the industry’s transition to electric vehicles better than several rivals by maintaining a broad range of petrol, diesel and electric models, the company has not escaped the slowdown in China, its largest single market.
Vehicle deliveries in China fell by 30.2 per cent year-on-year in the second quarter and by 20.4 per cent to 261,773 units over the first half. Sales in the country dropped to about 626,000 vehicles in 2025 from a record 847,900 in 2021.
Europe overtook China as BMW’s largest sales region in the first six months of this year, the first time it has done so since 2013. Group deliveries worldwide fell 4.2 per cent to 1.16 million vehicles over the period.
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.
BMW is due to publish its half-year results on July 30.
BMW’s announcement comes as Germany’s automotive sector undergoes a massive restructuring. On July 27, Porsche confirmed it would cut a further 5,000 jobs by 2035 at its Zuffenhausen plant and its Weissach development centre, in exchange for a job-security guarantee running to the end of 2035 and cumulative investment of €2.1 billion.
Meanwhile, Volkswagen Group is preparing an overhaul that could see up to 100,000 jobs disappear worldwide, alongside plans to halve its model range by 2030 and reduce production capacity by around 10 per cent, to some nine million vehicles a year.
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.
The cuts land as the European Union revisits the centrepiece of its Green Deal for road transport. On December 16, 2025 the European Commission proposed replacing the 100 per cent carbon dioxide reduction target for new cars in 2035 with a 90 per cent one, allowing plug-in hybrids and combustion models to be registered beyond that date if the remaining emissions are offset.
The proposal is being negotiated by the European Parliament and the Council of the European Union, with carmakers pressing for further flexibility and environmental groups warning that a weaker target would slow investment in electric vehicles.
