BMW plans to cut thousands of jobs after its second-quarter profits dropped 35%. Executives described the results as disappointing as the company reworks its business model. Pre-tax earnings fell to $1.95 billion, while the core profit margin shrank to 2.3% from 5.4% the previous year.
A steep decline in Chinese sales drove much of the downturn. Deliveries there fell 30% year over year. Global sales slipped 5%, but the Chinese market’s struggles—fueled by rising competition from local brands and weaker consumer spending—had the biggest impact. Executives also cited the Middle East conflict as a factor reducing demand.
Voluntary severance expected to lead cuts
CEO Milan Nedeljkovic stated the company would examine how it operates, including processes and structures once considered fixed. The review will cover both internal combustion and electric vehicle lineups, along with possible partnerships to lower costs.
While BMW hasn’t disclosed exact job cut figures, estimates suggest up to 8,000 positions may go, primarily through voluntary severance. The company confirmed several thousand reductions by the end of 2027 but avoided specifics. Nedeljkovic made clear the workforce would face changes, saying, “We are making the company leaner.”
Similar challenges affect other German automakers. Volkswagen intends to eliminate up to 100,000 jobs globally. Even its premium brands, including Porsche and Audi, are under pressure. Recently, Audi workers protested the planned shutdown of the Neckarsulm plant, highlighting industry-wide unrest.
Electric transition adds pressure
Moving to electric vehicles has proven expensive. The shift demands heavy spending on new technology while sales growth slows. BMW’s electric models, once a strong point, now face weaker demand than anticipated, especially in Europe and China. The company has already pushed back some production targets, and further adjustments appear likely.
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BMW has reduced staff before. In 2019, it cut 6,000 jobs during a restructuring. The current situation is worse, with China’s slowdown and geopolitical issues creating more uncertainty. The automaker’s choice to avoid forced layoffs for now may reduce tension, but economic and industry challenges cloud the future.
Unlike Audi, BMW isn’t closing major plants yet. Still, shrinking margins and rising competition mean its decisions will draw close attention. The voluntary severance program should start later this year, though details on eligibility and payouts remain unclear.
The cuts reflect broader changes for German automakers. These companies have depended on premium pricing and strong exports, but those advantages are fading. Now they must rethink supply chains and product lines, often at workers’ expense.
China’s slowdown has been particularly damaging.
BMW’s electric vehicles face softer demand than expected.
