BMW to cut management roles by 20% as AI drives restructuring

BMW said Wednesday it plans to cut its divisions and associated management roles by 20% by mid-2027 as it expands artificial intelligence use to boost efficiency and profitability.

Announcing the measures at its Capital Market Day, the German automaker said comparable reductions would follow at lower organizational levels.

The restructuring builds on an agreement reached with the company's Works Council in July and includes a voluntary severance program, BMW said.

The company said artificial intelligence would help accelerate processes and decision-making across development, purchasing, production, sales and aftersales.

Chief Financial Officer Walter Mertl said the technology would support “more agile and efficient development, leaner structures and faster decision-making.”

BMW aims to restore its automotive operating profit margin to its long-term target of 8-10% by the start of the next decade, with an interim goal of 3-5% in 2028.

The automaker also plans to streamline its vehicle lineup, expand localized production in China and introduce a compact electric model focused on Europe in 2028.

Industry-wide job cuts

Other automakers have also announced substantial workforce reductions as they seek to lower costs amid intensifying competition and the transition to electric vehicles.

Volkswagen agreed with employee representatives in December 2024 to reduce its workforce at German locations by more than 35,000 by 2030.

The agreement also included lower production capacity and a job security framework running through 2030.
Ford announced plans in November 2024 to eliminate 4,000 positions in Europe by the end of 2027, primarily in Germany and the UK.

The US automaker cited losses in its European passenger vehicle business, disruptive competition and weaker-than-expected demand for electric cars.