BMW plans to streamline its management structure using artificial intelligence, aiming to reduce about 20% of management positions by mid-next year, in conjunction with existing voluntary departure programs. Approximately 8,000 white-collar jobs globally are included in the layoffs.

The company disclosed that the cuts will initially affect certain divisions and corresponding management roles, then cascade down to lower levels. The group has about 65 senior vice presidents and around 400 senior positions beneath them; estimating a 20% reduction means about 100 senior roles will be eliminated. The goal is to accelerate decision-making in R&D, procurement, sales, and after-sales using agent-based AI, thereby shortening reporting chains.

The 8,000 positions represent about 5% of the company's approximately 154,000 global employees. In Germany, among about 84,000 to 87,000 employees, around 40,000 non-production white-collar workers will receive voluntary departure offers, covering administrative, R&D, planning, and headquarters functions in cities like Munich, Regensburg, Dingolfing, and Leipzig, while production line workers are not included. The program is set to start in October 2026 and aims to be completed by the end of 2027.

New CEO Milan Nedeljkovic stated that the continuous use of agent-based AI across the company will change the pace of development and decision-making speed. The group hopes to return the automotive business profit margin to 8% to 10% in the early next decade, with a target of 5.3% for 2025, down from a recent low of 2.3%, and aiming for 3% to 5% by 2028. Direct pressures for this downsizing include declining sales in China, U.S. tariffs, and spillover from conflicts in the Middle East.

In July, a voluntary buyout was agreed upon with the corporate works council, avoiding forced layoffs and plant closures. The overseas side will rely more on natural attrition and contract expirations. The company has set aside about €1 billion for the buyouts in Germany and expects to save about €1 billion annually starting in 2028. During the same period, two new car models will be launched, and consideration is being given to introducing higher-end models between BMW and Rolls-Royce.

Funds will initially flow from headquarters and R&D white-collar positions into the Neue Klasse electric platform, agent-based AI toolchain, and higher-margin models. The sellers are high-cost white-collar workers and middle management in Germany, while the buyers are retained production capacity, software, and high-end vehicle profits. The event-driven rationale is clear: after profit warnings, using buyouts to change structure avoids mass plant closures. Beneficiaries will be profit margin recovery and shareholders, while the burden will fall on indirect positions like those at the Munich R&D center and the supplier service chain reliant on the German white-collar system.

Companies like Alphabet have automated about 90% of previously manual processes using agents, with procurement systems capable of automatically issuing orders, verifying responses, and releasing routine cases. The reduction in management positions is synchronized with these tools, meaning that middle coordination roles are being replaced by systems rather than just a simple headcount adjustment.

Source: Public Information