German automotive giant BMW said Wednesday it aims to simplify its structures and rely more on artificial intelligence to more quickly adapt to global market changes, with a 20% cut to the number of "divisions and associated management roles" by mid-2027.
The move initially affects relatively senior heads of division, although the effect will also be felt at lower management levels. It is not, however, linked to a large-scale reduction in headcount, the Munich-based automotive group said.
Earlier this year, BMW announced a voluntary redundancy program across all areas except production. The total global workforce is to be reduced by around 8,000, according to company sources, with many jobs likely to be cut in administration, as well as research and development in Germany.
Chief executive Milan Nedeljkovic said BMW's organizational structure in Munich was "simply too large" and needed to become leaner and more agile.
Production in Germany, in contrast, was well utilized and therefore excluded from the redundancy program.
Nedeljkovic said the main challenge was to bring costs back to a level at which the company could compete on the world market with competitive prices and corresponding margins.
In China in particular, BMW intends to place greater emphasis on regionalization – in development, production and procurement – both to reduce production costs and to respond to the specific preferences of Chinese customers.
"The model of importing vehicles from other countries into China will have been phased out by the early part of the next decade," the company said. BMW said it is examining the possibility of exporting from China to the Southeast Asian markets in the future.
Through greater use of artificial intelligence, BMW aims to identify more effectively where existing solutions or supplier components can be used instead of in-house developments.
Nedeljkovic said he saw significant potential here for cost-cutting.
In a further effort to cut costs, BMW plans to reduce the complexity of its product range and cut unprofitable vehicle variants.
As an example, the newly launched 3 Series will no longer be offered with a diesel engine in its eighth generation. Nedeljkovic stressed, however, that this was not a fundamental decision against the combustion engine and that it could well be offered again on other models.
