BMW plans 20% cut in senior management roles as it simplifies operations

Friday 02 - 11:47

By: Azzat Manal

BMW plans 20% cut in senior management roles as it simplifies operations

German automaker BMW plans to reduce the number of divisions and associated management positions by around 20% by mid-2027 as part of an effort to simplify its organization and respond more quickly to changes in global markets.

The restructuring will initially focus on senior management positions, although changes are also expected to affect lower management levels. BMW said the initiative should not be interpreted as a broad-based reduction in its overall workforce.

The Munich-based company has already introduced a voluntary redundancy program covering most areas of its business, with production operations excluded. Company sources have previously indicated that the global workforce could be reduced by around 8,000 positions by the end of 2027, particularly in administrative functions and research and development in Germany.

BMW Chief Executive Milan Nedeljkovic said the group's organizational structure in Munich had become too complex and needed to be made leaner and more flexible. The company is seeking to reduce operating costs and improve its ability to compete internationally through more competitive pricing and stronger margins.

Germany's production facilities are not included in the current redundancy program, as BMW said its factories there remain well utilized.

Artificial intelligence is also expected to play a larger role in the company's efforts to improve efficiency. BMW plans to use AI to identify existing technologies and supplier components that could replace some solutions developed internally, potentially reducing development and procurement costs.

The automaker is also reviewing its product portfolio, with plans to reduce complexity and discontinue vehicle versions that do not generate sufficient returns. The company cited the latest generation of the BMW 3 Series as an example, noting that a diesel option will not be offered when the eighth generation arrives.

Nedeljkovic said the decision should not be viewed as a rejection of combustion-engine technology altogether, leaving open the possibility that diesel or other combustion-powered models could return in different product lines.

China is another key part of BMW's restructuring strategy. The company intends to expand regional development, production and procurement in the Chinese market to lower costs and better respond to local consumer preferences.

BMW expects its traditional model of exporting vehicles from other countries into China to largely disappear by the beginning of the next decade. At the same time, the company is examining whether vehicles produced in China could eventually be exported to markets in Southeast Asia.

The measures form part of BMW's broader effort to streamline its operations, reduce costs and adapt its business model to changing demand, regional competition and the growing use of artificial intelligence across the automotive industry.