BMW to step up job cuts as China woes deepen

BMW plans to intensify its planned job cuts amid a decline in third-quarter profits, attributed to fierce competition and dwindling demand in China, the world's largest automobile market. The company's CEO, Milan Nedeljkovic, declined to specify the exact number of additional layoffs but pledged to make as many as necessary, stating, "We’ll go as far as our feet will carry us, and as far as makes sense for us."

The slump in sales in China has necessitated significant changes across Germany's automotive industry. Competitors Mercedes-Benz and Volkswagen have also announced their own rounds of job reductions. Mercedes-Benz is reviving its own layoff program, while Volkswagen aims to eliminate 120,000 jobs globally across its 10 brands by 2030. According to an AFP source in July, BMW had initially targeted 8,000 job cuts by the end of 2027 as part of its restructuring program.

However, the company may need to expedite its job cuts due to a strong uptake in its latest redundancy scheme. Nedeljkovic confirmed that the company could complete the program more swiftly, "This highly positive response to the program opens up more significant potential to faster streamline our structures."

In the three months leading up to September, BMW reported a 15% drop in net profit to €1.45 billion ($1.6 billion), with overall vehicle sales falling 6.3% to €30.5 billion. The decline was particularly pronounced in China, where deliveries plummeted by 24.8%. As part of its strategy to regain market share, BMW has pledged to shift more of its supply chain for Chinese vehicles back to the country.

The company also aims to learn from its Chinese operations to bolster its businesses in other parts of the world, notably through the development of driving assistance software in collaboration with local partner Momenta. Nedeljkovic highlighted the mutual flow of learning and technology transfer between BMW's Chinese and global operations, subject to legal constraints.