BMW to reduce senior management by one fifth

German carmaker BMW plans to simplify its structures and rely more heavily on AI to adapt more quickly to global market changes, with a 20% cut to the number of "divisions and associated management roles" by mid-2027, the company said on Wednesday.

The move initially affects relatively senior heads of division, although the effect will also be felt at lower management levels. It is not, however, linked to a large-scale reduction in headcount, the Munich-based automotive group said.

Earlier this year, BMW announced a voluntary redundancy programme across all areas except production. The total global workforce is to be reduced by around 8,000, according to company sources, with many jobs likely to be cut in administration as well as research and development in Germany.

Chief executive Milan Nedeljković said BMW's organizational structure in Munich was "simply too large," and needed to become leaner and more agile.

Production in Germany, by contrast, was well utilized and therefore excluded from the redundancy programme.

Costs must fall

Nedeljković said the main challenge was to bring costs back to a level at which the company could compete on the world market with competitive prices and corresponding margins.

In China in particular, BMW intends to place greater emphasis on regionalization - in development, production and procurement - both to reduce production costs and to respond to the specific preferences of Chinese customers. 

"The model of importing vehicles from other countries into China will have been phased out by the early part of the next decade," the company said. BMW said it is examining the possibility of exporting from China to south-east Asian markets in future.