BMW Starts Voluntary Redundancy Program While Cutting 20% Of Management Roles

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BMW is streamlining its operations with voluntary redundancies for indirect staff in Germany and a major overhaul of its management structure.

BMW is about to get a little less top-heavy in Germany. The automaker is launching a voluntary redundancy program for indirect staff. The program gets underway this month and is scheduled to run through 2027. Munich expects the money it spends on the program to pay for itself within about two years through savings from having fewer employees on the payroll.

No numbers have been given, but a Reuters report from late July cited a person familiar with the matter as saying that as many as 8,000 jobs could vanish. To put that into perspective, the whole BMW Group employed 154,540 people at the end of last year. In other words, the workforce is allegedly slimming down by roughly five percent.

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And then there’s the management shake-up. BMW plans to reduce the number of divisions and associated senior vice president positions by 20% by mid-next year. The cuts won’t stop there, with the company planning comparable reductions at lower organizational levels. In other words, BMW isn’t just trimming a few positions at the top and calling it a day. It’s looking to remove several layers of corporate bureaucracy.

BMW Will Rely More On AI To Get Things Done

BMW also says it will lean more heavily on artificial intelligence to speed up processes and improve efficiency. The idea is simple: automate more repetitive work, simplify the company’s structure, and make decisions faster. That sounds great on paper, although anyone who has ever worked at a large company knows that making an organization smaller doesn’t automatically make it less complicated. Still, BMW clearly sees plenty of room to streamline.

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The timing isn’t exactly a surprise. BMW is spending heavily on its Neue Klasse rollout, batteries, electric vehicles, and new technology while dealing with a difficult global market. The latter is especially worrying in China, the Group’s largest market, where sales have been slipping for consecutive years. Cutting costs has therefore become increasingly important, and management is now part of the equation.

BMW Is Removing Models From Its Complex Lineup

The cost-cutting extends to the lineup, as several models won’t be renewed for another generation. The only BMW officially confirmed so far to get the axe is the 2 Series Active Tourer. However, multiple reports say the i4 and iX aren’t long for this world either, and the XM’s future looks bleak as well. The company has already phased out the X4, Z4, and 8 Series as it focuses more on models that bring in more money.

The imminent iX4 is unlikely to be a blockbuster, but development costs must have been relatively low, since it’ll essentially be an iX3 with a different rear half. The same goes for the already confirmed i3 Touring, which is essentially an i3 sedan in wagon form. Despite these cuts, BMW is still investing time, effort, and money to bring an electric i4 convertible to market. Presumably, an i4 coupe without an engine is also coming. A more volume-friendly model will be a small entry-level EV for Europe from 2028, while a high-margin product will take the shape of a flagship SUV for North America, possibly the X9.