BMW will cut a fifth of senior positions using AI
Quick Look
- BMW plans to cut 20% of management positions using AI to optimize processes.
- At the same time, the automaker is cutting about 8,000 office employees in Germany, seeking to increase flexibility and profitability amid weakening financial performance.
AI-generated summary
Why It Matters
BMW faced a profit warning in June. The company is also implementing a plan to cut 8,000 office positions in Germany.
BMW has decided to cut a fifth of its leadership positions using artificial intelligence (AI). Bloomberg reported this.
However, a wave of layoffs will also affect lower levels. So the auto giant hopes to achieve greater flexibility. It had already reached an agreement in July to cut office positions in Germany. The plan calls for layoffs of about eight thousand employees, which is about five percent of the company's total workforce worldwide.
As the agency noted, BMW has become another large company that is reducing management personnel through AI. United Parcel Service has laid off 12,000 managers, and German airline Deutsche Lufthansa has unveiled plans to cut 4,000 administrative jobs by the end of the decade to improve profitability.
It is emphasized that BMW has avoided the worst problems faced by its competitors due to the recession in China. But in June it stunned investors with a profit warning.
Open Questions
- What management functions will AI take on?
- What will be the financial impact of these cuts?
