BMW, restructuring plan with artificial intelligence and cuts of managers

Fewer managers and more artificial intelligence. At the Capital Market day in Munich, BMW announced a restructuring plan focused on AI, the reduction of management teams and the launch of two new models, to regain investor confidence after a series of profit warnings and a sharp drop in the share price.

The medium-term program

The German car company has illustrated a redundancy program that should affect around 8,000 jobs in Germany. BMW, whose shares have lost more than a third of their value in the last year to the lowest level in more than six years, presented the recovery plan by setting a target: a margin on cars between 3 and 5% in 2028. By the beginning of the 2030s, the company aims to return to a margin range between 8% and 10%, up from the 2.3% recorded in the latest results.

To do this, management aims to "simplify the business, cut costs and increase sales of high-end models", the analysts explain to Bloomberg. The group's objective is to "recover the profitability deteriorated by the price war with China, by investments in updating the range of electric cars and by the repercussions of the war on revenues".

Cutting of managers

By mid-2027, the group aims to reduce its divisions and their management roles by a fifth. Artificial intelligence will play a central role in efforts to streamline the business and accelerate decision-making processes.

CEO Milan Nedeljković said the plans will help BMW "face the increasingly fierce competition that will characterize this sector in the coming years." "This is not a cost saving program," the CEO clarified, however.

The product

The group is also adapting its product strategy to divergent trends in key markets: it plans to launch an entry-level electric vehicle for Europe from 2028, while targeting more affluent US consumers with a new luxury SUV. In China, BMW plans to further localize production and rely more on local partners for technologies such as autonomous driving and embedded software; it is also evaluating the possibility of exporting from China to South-East Asia.

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