German automaker jobs are now more endangered than they’ve probably ever been. Not long after Volkswagen announced that it would be cutting 50,000 jobs by the end of the decade and Porsche said it would be cutting close to 10,000, BMW is the next to break the news.
The German brand is slashing costs as it cuts its profit forecasts, which are now the lowest of its peers.
Big Cuts Are Meant To Offset Slim Margins
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BMW is planning to cut 8,000 jobs, a spokesperson told Automotive News. The automaker is launching a voluntary severance program that was agreed to by its employee works council, the report says.
These cuts are high-level jobs. Administration and development divisions are under the microscope, and the report said that production operations, that is, assembly workers, are not part of the reductions.
Automotive News reports that BMW expects most of the voluntary departures to come from its German operations. In the grand scheme of things, 8,000 workers is around 5% of the company’s total workforce and a significant portion of the administration and development teams.
Will Cutting Workers Compensate For Low Sales?
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US tariffs and falling sales in China are getting the blame as BMW cuts profit forecasts. The company had predicted margins as high as 6% this year, down from 10% in 2023, but has since cut that to 1%-3%. That’s despite the start of the rollout of its Neue Klasse models, a wholly new design language and vehicle architecture that has been touted for years as the future of the company.
Heavy price competition, improved domestic vehicles, and a general slowdown in China has been hard on BMW, as well as other German automakers. The company’s sales in that country peaked at nearly 850,000 units in 2021, but fell to 626,000 last year. For the first half of the year, sales there reached just 260,000.
Horst Ott, an official with German union IG Metall and a member of the BMW board, said that the company is “responding to the collapsing market in China while simultaneously working to strengthen the competitiveness of its German sites.” He said that the collective agreement was still in effect.
CarBuzz Insight – Why This Matters:
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BMW is taking big steps to cut costs to make up for lower sales. Right now, sales are up in the US and Europe. If that changes, then the automaker could have to cut jobs in the US as well. BMW is the largest US auto exporter by value, and with tariffs already impacting the profits of those exports, it won’t take much of a push to require even more widespread actions.
Combined with VW’s cuts, it could also lead to wider-ranging measures by German officials to protect jobs there. Those could seriously change the manufacturing footprint of German automakers, though it’s too early to predict.
BMW is expected to announce the cuts to staff at a company-wide meeting on July 30. The program will start in October and run into next year, and it is anticipated to boost profits for 2028. That is, unless sales in China continue to fall despite the introduction of long-wheelbase models developed specifically for the market.
Sources: Automotive News, BMW
