At its capital markets day, BMW said it will slim certain divisions and layers of management, with the impact flowing into lower levels of the org chart. The company wants to speed up decisions by becoming more nimble "through the efficient use of artificial intelligence." The push for voluntary departures follows pressure tied to weaker conditions in China and the effects of the conflict in the Middle East.
It was also the first big investor moment for Chief Executive Officer Milan Nedeljkovic, a former BMW trainee who took the top job in May. He said most of the affected positions are in Munich.
BMW said AI will support streamlined leadership by driving "a 20% reduction" of its senior vice presidents, plus a "corresponding consolidation of management structures." A person familiar with the organization said there are roughly 65 senior vice presidents directly below the board and another level of about 400 senior roles beneath them. Using that math, roughly 100 senior posts would be eliminated.
The company has been unusually upfront about AI's role. "Consistent use of agentic AI applications across all areas of the company will be a game-changer for more agile and efficient development, leaner structures and faster decision-making," Chief Financial Officer Walter Mertl said. Others are moving in a similar direction: United Parcel Service Inc. cut 12,000 manager positions, with AI ensuring those jobs will not return, and Deutsche Lufthansa AG outlined plans to eliminate 4,000 administrative roles to shave costs.
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In July, BMW agreed to reduce white-collar staff in Germany by some 8,000 roles, equal to about 5% of its global workforce. Cost control is showing up elsewhere too. Citing a shift in priorities, the company withdrew from next month's Paris car show, while Nedeljkovic has continued to hunt for further savings.
Product plans are being tuned to local preferences, notably in China, where a growing share of shoppers are opting for homegrown marques like BYD Co. BMW intends to court ultra-wealthy buyers with offerings positioned between the BMW lineup and the Rolls-Royce marque. That would likely square it off against products such as Mercedes-Benz Group Co.'s Maybach sedan. Alongside a new budget-positioned electric model for Europe and a premium sport-utility for the US, BMW will prune its lineup by removing the 2-Series Active Tourer as well as the diesel variant of the 3-Series sedan. BMW is likewise the owner of the Mini and Rolls-Royce brands.
BMW had mostly avoided the brunt of China's slowdown until June, when it cautioned that margins could sink to 1% at the floor this year. It is seeking to get back to its long-run auto margin goal of 8% to 10% by the beginning of the next decade, with a waypoint of 3% to 5% in 2028. Between an AI-enabled management shakeup and a tighter model lineup, BMW laid out the levers it plans to pull to rebuild earnings.
If you hold BMW stock or broader auto exposure, watch how quickly those management cuts filter into costs and whether the new models resonate where they are aimed.
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