BMW is planning leaner management structures and cost reductions

BMW wants to simplify its structures in order to become faster. The company announced that the number of “areas and assigned management functions” should decrease by 20 percent by mid-2027. This initially concerns the relatively high level of department managers, but the effect will also be reflected at lower management levels. However, this does not involve a large number of job cuts.

BMW announced a voluntary job cuts program in all areas except production in the summer. According to company circles, the number of employees worldwide is expected to fall by around 8,000 - many jobs will probably be lost in administration but also in development in Germany. The organization that we have in Munich is “simply too big,” said CEO Milan Nedeljkovic. You have to become smaller and quicker. Production in Germany, on the other hand, is well utilized. She is also excluded from the job cuts program.

Costs must fall

The biggest challenge is to get the costs back into a framework so that you can be positioned on the global market again with competitive prices and corresponding contribution margins, said Nedeljkovic.

In China in particular, BMW wants to focus even more on regionalization - in development, production and purchasing. In order to produce more cheaply, but also to respond to the specific wishes of Chinese customers. “The model that we import vehicles from other countries into China will be phased out at the beginning of the next decade,” the company says. On the contrary - the Munich-based company is even considering exporting from China to Southeast Asian markets in the future.

With the increased use of artificial intelligence, BMW also wants to better identify where existing solutions or parts from suppliers can be used instead of its own developments. Nedeljkovic sees great potential here to save costs.

3 Series without diesel in the future

BMW should also contribute to this by reducing the complexity of its offering and eliminating non-profitable vehicle variants. Among other things, the new 8th generation 3 Series will no longer be offered a diesel engine. But that is not a fundamental decision against the diesel engine, said Nedeljkovic. With other models it could well be offered again.