BMW to Cut 20% of Divisions and Management Roles, Expand AI Deployment

BMW unveiled a strategic plan at its investor event on Wednesday, saying it will cut the number of business divisions and management positions by 20% in the coming months, with a similar reduction planned for sub-organizational levels. The automaker said it will deploy artificial intelligence across vehicle development, raw-material procurement, marketing and after-sales operations to improve efficiency and agility.

According to a person familiar with the matter, executives reached a broad restructuring agreement with labor representatives in July 2026, which could affect up to 8,000 white-collar workers in Germany. BMW employed just under 155,000 people worldwide at the end of 2025.

CEO Milan Nedeljković said the company is optimizing its organizational structure and cost base to cope with intensifying competition in the coming years, and the personnel restructuring is an important part of that effort. BMW said it needs to significantly increase speed and efficiency, targeting an EBIT margin of 8%–10% for its automotive segment by the early 2030s, compared with 5.3% in 2025. The company expects short-term margins to remain under pressure, with a 3%–5% target for 2028.

The German carmaker is facing intense competition in China, high energy costs and tariffs. BMW also outlined plans to focus on its most profitable models in key markets, streamline derivatives, and expand localized production in China. Further decisions are expected in spring 2027.