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BMW Plans to Cut 8,000 Jobs Worldwide

The headquarters of Bayerische Motoren Werke AG in Munich(Bild: AFP/CHRISTOF STACHE)

The shake-up in the automotive industry continues. As was announced on Wednesday, German automaker BMW plans to cut approximately 8,000 jobs worldwide.

According to reports, this will be achieved through natural attrition and a voluntary severance program. Employees in administration, development, and management are likely to be most affected.

Speculation Since June
Speculation that BMW was planning a job-cut program has been circulating since mid-June. At that time, Milan Nedeljkovic—who had been promoted from head of production to CEO just one month earlier—was forced to issue a significant profit warning.

At the time, it was also stated that the company would “intensify and accelerate ongoing cost reductions through further structural and efficiency measures.” The General Works Council demanded “immediate and binding” talks at the time. These have now apparently been concluded within six weeks—in typical BMW fashion, with little fanfare. According to reports, both Works Council Chairman Martin Kimmich and Nedeljkovic are expected to speak at the announcement of the workforce restructuring program. The severance program in Germany is reportedly not selective. It is therefore open to all employees outside of production—a total of several tens of thousands of people.

Steyr Plant Not Affected
No figures regarding the amount of the planned cost savings have been made public so far. The Bavarian automaker also operates a plant in Steyr, Austria, and works with Austrian automotive suppliers. In response to an inquiry from APA, BMW in Austria stated that the Steyr plant would not be affected by any layoffs. 

Rival Volkswagen had to make cuts earlier.(Bild: AFP/TOBIAS SCHWARZ)

IG Metall Bavaria is reacting relatively cautiously to the job cuts: “BMW is now responding to the slumping market in China and is simultaneously working to strengthen the competitiveness of its German locations,” says district director Horst Ott. He also emphasizes that the cuts are being implemented “using the tools available to the parties at the workplace” and that collective bargaining agreements are not up for negotiation.

Even BMW Cannot Escape the Global Downturn
For a long time, BMW was the last major German automaker to avoid a large-scale job-cutting program. Volkswagen, Mercedes, Audi, Porsche—all had already announced job cuts last year—in some cases on a much larger scale. And within the VW Group, a battle is already underway over a second round of cuts—with numbers running into the tens of thousands. Just this week, the subsidiary Porsche kicked things off by cutting another 5,000 jobs. Major suppliers are also scaling back.

The entire German auto industry is currently suffering from the slump in the Chinese market and the sharply increasing competitive and price pressures there. Added to this are U.S. tariffs, increasingly fierce Chinese competition on the global market, and, most recently, the impact of the crisis in the Middle East on the global economy. Even BMW cannot escape these challenges, even though the Munich-based company has generally fared somewhat better than its German competitors in recent times.