BMW Cuts 20% of Divisions to Reduce Costs
BMW is cutting 20% of its divisions and senior management roles by 2027 to simplify its structure and integrate artificial intelligence.
BMW announced a restructuring plan to eliminate 20% of its divisions and associated senior management roles by mid-2027. The company aims to simplify its organizational structure and reduce costs by integrating artificial intelligence to flatten its hierarchy and accelerate decision-making. This initiative follows a separate voluntary redundancy program targeting roughly 8,000 global positions in administration and research and development, though German production roles are excluded.
Chief Executive Milan Nedeljkovic stated the Munich-based organization was "simply too large" and required more agility to remain globally competitive. To combat profitability pressures in China, the company is shifting toward regionalization in procurement and development. BMW plans to phase out the model of importing vehicles into China by the early part of the next decade.
As part of the broader efficiency drive, the company is reducing product complexity by removing unprofitable variants. This includes the decision to remove the diesel engine from the eighth-generation 3 Series.
