BMW offers buyouts to thousands of German workers to cut costs

[BERLIN] BMW is offering voluntary severance packages to thousands of its workers in Germany, as the carmaker tries to become leaner to better compete with rivals from China.

The manufacturer expects the departures in Germany to account for most of the around 8,000 positions it’s looking to cut globally, according to people familiar with the matter.

The offer will go out to staff in research, development, planning and other corporate functions, with factory floor workers not eligible, said the people, who asked not to be identified as the plans aren’t public.

BMW is also looking to streamline its management ranks in the coming months as part of the broader cuts, they said.

Chief executive officer Milan Nedeljkovic and works council leaders are set to announce the voluntary reduction programme during a staff-wide meeting in Germany on Wednesday, the people added. The programme begins in October and will run through 2027, they said.

A spokesman for BMW confirmed that the company has reached a deal with the works council on a restructuring programme in Germany, declining to further comment.

Nedeljkovic is looking to cut costs after a major profit warning last month that puts BMW on course to be the least profitable major European automaker. The manufacturer expects the programme to boost profitability in 2028, the people said.

The CEO, who took over in May, is responding to a thicket of challenges, above all the steep decline in demand in China, BMW’s largest single market. The combination of mounting competition from local manufacturers led by BYD – especially on electric vehicles – and a property crisis is weighing on all carmakers there.

BMW is also facing pressure from the fallout of the war in the Middle East and US tariffs. The company recently decided to pull out of this year’s Paris car show as it rethinks its priorities. Last month, BMW said it will intensify its existing cost reduction plans for this year.

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BMW employed 87,436 people in Germany at the end of last year, more than half of its total global headcount. Its workforce in the country was already down 2.3 per cent from the prior year, according to the company’s 2025 annual report. 

Nedeljkovic previously served as head of production at BMW. The manufacturer has invested billions of euros in recent years on its Neue Klasse platform of vehicles, which it’s now introducing around the world. BMW is hoping that the new models will help it better compete with the likes of Tesla and Chinese carmakers. 

The company is scheduled to publish detailed second-quarter results on Thursday. BLOOMBERG