BMW AG plans to cut about 20% of its senior management positions by mid-2027 as the luxury carmaker expands its use of artificial intelligence to reduce costs and improve profitability.
The Munich-based automaker said on Wednesday that it would streamline its divisions and management structures through an agreed buyout programme, with the restructuring expected to affect other levels of the organisation.
BMW has about 65 senior vice presidents reporting directly to its board, followed by roughly 400 other senior positions. The planned reduction could affect about 100 high-level roles.
The company said it would use AI to simplify its leadership structure through a 20% reduction in senior vice presidents and a consolidation of management layers.
Most of the affected positions are expected to be in Munich, BMW Chief Executive Officer Milan Nedeljkovic said at a media briefing, according to Bloomberg.
The move follows BMW’s decision in July to reduce white-collar jobs in Germany. People familiar with the plan estimated the company could eliminate about 8,000 positions, representing around 5% of its global workforce, through voluntary departures.
BMW is facing pressure from weaker demand in China and the impact of the Middle East conflict. The company warned in June that its automotive profit margin could fall to as low as 1% this year.
BMW Chief Financial Officer Walter Mertl said the wider use of AI agents across the company would help create leaner structures, speed up decision-making and improve efficiency.
The company is targeting a return to its long-term automotive margin range of 8% to 10% by the start of the next decade, while expecting an interim margin of 3% to 5% in 2028.
BMW’s AI-driven restructuring comes as other major companies also reduce management and administrative roles. United Parcel Service has cut 12,000 managers, while German airline Deutsche Lufthansa has announced plans to eliminate 4,000 administrative positions.
Nedeljkovic, who became BMW’s CEO in May, is also changing the company’s product strategy as it seeks to improve profitability.
BMW plans to adjust its vehicle lineup to suit local consumer preferences, especially in China, where domestic manufacturers such as BYD have increased competition.
The company also plans to introduce more vehicles positioned between its BMW and Rolls-Royce brands, targeting a segment similar to Mercedes-Benz’s Maybach range. It is also preparing a new entry-level electric vehicle for Europe and a high-end SUV for the United States.
BMW will also simplify its product portfolio by ending production of models including the 2-Series Active Tourer and the diesel version of its 3-Series sedan.
Erizia Rubyjeana
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