BMW is preparing to eliminate approximately 8,000 positions globally—roughly 5% of its workforce—as part of a sweeping cost-cutting restructuring set to begin this fall, according to Bloomberg.

The German automaker's shares have fallen 36% year-to-date on the Frankfurt exchange, though they have stabilized near 60 euros per share over the past month. The sell-off has wiped out billions in market value and reflects a wider investor reassessment of Europe's legacy premium automakers, several of which—including Volkswagen and Mercedes-Benz—have also issued profit warnings or announced efficiency programs in recent months.

Voluntary departures in Germany are expected to account for the majority of the cuts. The buyout offer will be extended to employees in research, development, planning, and other corporate functions. Factory floor workers will not be eligible, according to sources familiar with the plans who spoke on condition of anonymity because the details are not yet public. BMW also intends to streamline its management ranks in the coming months as part of the broader initiative. The decision to target white-collar roles rather than production staff signals an effort to protect manufacturing capacity while reducing overhead across its engineering and administrative organizations.

The job reduction program is slated to launch in October and run through 2027, with the company projecting improved profitability by 2028. That timeline places the bulk of the restructuring during a period when the European auto industry faces simultaneous pressure from tightening EU emissions targets, shifting consumer preferences toward electric vehicles, and ongoing trade tensions between Brussels and Beijing over Chinese EV imports.

The restructuring follows a profit warning issued last month. JPMorgan analyst Jose Asumendi described BMW's latest forecast downgrade as a "wake-up call for the auto industry" and a "radical earnings cut," while noting that the company is generally executing well operationally. Asumendi cautioned that BMW must address its compact-segment product strategy in China, where European premium automakers have been increasingly priced out of the market. He also indicated that BMW will likely incur one-time charges to downsize its global production footprint, with a particular focus on Europe.

The overhaul comes amid mounting pressures on multiple fronts. BMW has experienced declining sales in China and faces intensifying competition from electric vehicle manufacturers led by BYD, both in the European market and internationally. These challenges mirror a broader deterioration across Europe's automotive sector, where soft consumer demand, elevated production costs, and growing competition from Chinese manufacturers continue to compress margins.

Source: ZeroHedge