German luxury carmaker BMW plans to offer voluntary redundancy to nearly half of its permanent workforce in Germany as it seeks to cut around 8,000 jobs by the end of 2027, news agency AFP reported, citing a company source.
Around 40,000 of BMW’s approximately 85,000 permanent employees in Germany are expected to receive the offer from October. The programme will apply primarily to employees in desk-based roles, while workers on production lines will be spared from the planned reductions.
“The workforce will ultimately be reduced by around 8,000 people by the end of 2027,” the source told AFP, adding that the company was planning on the basis of that target.
BMW employs around 154,000 people globally.
Plan negotiated with works council
The voluntary redundancy programme was reportedly negotiated over six weeks between BMW’s management board and its works council, which represents employees in Germany.
The move comes as German carmakers seek to reduce costs amid reported pressure from weaker profitability on electric vehicles, US tariffs and rising competition from Chinese automobile manufacturers.
Notably, another German car maker, Volkswagen, is considering cutting as many as 100,000 jobs across its 10 brands, while rival Mercedes-Benz has also introduced a voluntary redundancy programme.
China slowdown weighs on BMW
BMW had so far been seen as being better placed than some of its German rivals because it continued to offer petrol and diesel vehicles alongside electric models. The strategy helped the company avoid expensive changes to its product plans while expanding electric vehicle sales.
However, the automaker issued a profit warning last month, pointing to a sharper-than-expected deterioration in its China business.
BMW is facing intense competition from domestic electric vehicle manufacturers in China, even as sluggish economic conditions continue to affect demand.
The company’s vehicle deliveries in China fell 30 per cent year-on-year during the three months ended June. Its full-year deliveries in the country had already declined to their lowest level since 2017 last year.
The planned job cuts indicate that even comparatively better-performing European luxury carmakers are being forced to reduce overheads as the global automotive industry navigates the expensive transition towards electric mobility and increasingly aggressive competition from China
The premium carmaker will extend the offer to around 40,000 employees in desk-based roles from October, while production-line workers will be excluded.