BMW to cut several thousand jobs in latest blow to German auto sector
BMW Announces Major Job Cuts Amid Industry Challenges
By Christina Amann and Rachel More
Details of the Redundancy Programme
BERLIN, July 29 (Reuters) - BMW said on Wednesday it will cut several thousand jobs in Germany by the end of 2027 under a voluntary redundancy programme, the latest German carmaker to axe staff in response to squeezed profits and weak demand.
BMW's severance programme, agreed between the company and the works council, targets the administration and development divisions, with production operations excluded, a company spokesperson said.
Expected Impact on Workforce
According to a person familiar with the matter, the total workforce is expected to shrink by around 8,000.
The Munich-based group currently employs about 150,000 people worldwide.
Industry-Wide Restructuring and Competition
Volkswagen and Mercedes-Benz have already struck agreements to cuts tens of thousands of workers, as Germany's automotive sector comes under pressure from the costly shift to electric vehicles, intense competition from China and U.S. tariffs.
Porsche and Audi Also Affected
On Monday, sports car maker Porsche, part of the Volkswagen Group, ramped up its restructuring to cut some 20% of staff by 2035.
Thousands of workers protested on Wednesday at the Neckarsulm plant of Audi, another Volkswagen brand. The site is one of four in Germany threatened with closure under Volkswagen's restructuring plans.
BMW's Financial Outlook and Management Response
BMW, formerly seen as a somewhat steady hand among its peers, cut its profit outlook in June for the current year, citing weaker-than-expected business in China, where vehicle sales have fallen sharply in recent months.
Cost-Cutting Measures Intensified
Chief Executive Milan Nedeljkovic subsequently said the automaker would accelerate and intensify ongoing cost-cutting efforts.
CEO's Address to Staff
On Wednesday, the CEO told staff that the rules dictating industry had substantially changed and with it the foundation of BMW's business model, according to a participant at a workers assembly in Munich.
Nedeljkovic warned of a challenging time ahead but said the measures were important to ensure BMW becomes more profitable, the source said.
Upcoming Financial Reports
BMW is scheduled to report its second-quarter earnings on Thursday.
(Reporting by Christina Amann, writing by Miranda Murray, editing by Sabine Wollrab, Thomas Seythal and Louise Heavens)
