BMW to cut up to 8,000 jobs worldwide as German auto crisis deepens

The severance program

BMW plans to cut up to 8,000 jobs worldwide by the end of 2027, relying on natural attrition and a voluntary severance program in Germany. More than half of the reduction is expected to fall on Germany, where BMW employs well over half of its roughly 154,000 staff worldwide; abroad the cuts run mainly through attrition. From October 2026, the Munich-based carmaker will offer individual severance packages to around 40,000 of its roughly 85,000 employees in Germany, targeting staff outside direct production. The company expects the workforce to shrink by 8,000 as a result, describing it as "the target, the target figure," according to company circles. First departures are expected later this year, with the program ramping up in 2027 and a positive impact on financials anticipated by 2028. The plan was largely negotiated with employee representatives. CEO Milan Nedeljković and group works council chairman Martin Kimmich presented it to the workforce together ahead of Wednesday's works meeting in Munich, with BMW's other German sites connected by video. Neither the management board nor the works council has confirmed the program publicly, and BMW declined to comment on the reports; the figures come from company sources briefed to the agencies dpa and AFP.

Industry-wide pressure

BMW is the last major German automaker to launch a large-scale job-cutting program. Volkswagen is considering up to 100,000 job cuts and several plant closures, while Mercedes-Benz already has a severance program underway. Porsche this week announced the elimination of a further 5,000 positions. The entire German auto industry is grappling with weak profit margins on electric vehicles, US tariffs, and a sharp decline in the Chinese market, where local competition and price pressure have intensified. The crisis in the Middle East has also weighed on the global economy, adding to the headwinds.

BMW's position

BMW had long been considered the most resilient of the German carmakers, but last month it issued a profit warning due to a worse-than-expected sales slump in China, its largest market. The company had invested heavily in the development of its "Neue Klasse" (New Class) vehicle architecture, aiming for a technological leap. BMW had already signaled last year that development costs would subsequently decline, and the job cuts are part of that effort to reduce structural costs. The severance program is not selective; it is open to all non-production employees in Germany, totaling several tens of thousands of people.

Financial impact

The cost of the severance program is estimated in the three-digit million euro range, though the final figure depends on how many employees accept the offer. In a capital markets call in June, CFO Walter Mertl indicated that the restructuring would involve one-time charges of around one billion euros, but it remains unclear how much of that sum is allocated to personnel reductions. The financial burden is expected to hit in the second half of the year. BMW has not disclosed the targeted savings from the job cuts.

What's next

The severance offers will be sent out from October, and the company expects the workforce reduction to be completed by the end of 2027. The program's success hinges on voluntary uptake, and the works council's involvement suggests a negotiated, rather than confrontational, process. BMW's ability to navigate the Chinese market downturn and the broader industry transformation will determine whether further measures are needed.