BMW is planning to cut as many as 8,000 jobs in Germany, according to reports. This has been seen as a sign of the carmaker trying to reduce costs amid pressure from Chinese rivals.
A BMW spokesperson said Wednesday that the company has launched a voluntary redundancy program in agreement with employee representatives. The spokesperson said BMW and its works council had agreed on a severance program targeting employees in the administration and development divisions, while production operations are excluded. BMW employs about 160,000 people worldwide.
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According to The Guardian, German carmakers have been facing intense pressure in the last few years because of the rise of Chinese competitors. In addition, European automakers are dealing with having to transition from petrol to electric, as well the impact of U.S. tariffs.
“The BMW Group is proactively shaping the profound changes taking place in its operating environment. These include the technological transformation of the automotive industry, geopolitical uncertainties, changing market conditions and developments in China,” a spokesperson said. Chief Executive Milan Nedeljkovic subsequently said the automaker would accelerate and intensify ongoing cost-cutting efforts.
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 cited by Reuters.
Nedeljkovic warned of a challenging time ahead but said the measures were important to ensure BMW becomes more profitable, the source said. Nedeljkovic warned of a challenging time ahead but said the measures were important to ensure BMW becomes more profitable, Reuters added.
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This comes shortly after Porsche said it will cut 9,000 jobs by 2035, as its parent company, Volkswagen, and its brands undergo restructuring. This amounts to around one in five jobs.
In a deal announced Monday, Porsche management and labor representatives agreed to 5,000 additional job cuts that avoid compulsory redundancies through measures like natural attrition and voluntary schemes. This comes after months of negotiation. A month earlier, reports revealed that Volkswagen is planning to cut 100,000 jobs and end production at four German plants over the coming years. The cuts would affect about 15% of the company’s workforce.
Reports also mentioned that Mercedes Benz is also cutting jobs as it navigates the shift to electric vehicles in a race with Chinese rivals while also dealing with the effects of tariffs.