BMWYY> BMW said it plans to cut the number of business units and management positions by 20% over the coming months, streamlining its organizational structure as the group prepares for an increasingly challenging market environment.

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BMW plans to cut 20% of its business units and management positions in the coming months to slim down its organizational structure.

The BMW Group will use artificial intelligence to improve operational efficiency.

Facing an even tougher market environment ahead, this new technology is expected to help the company do more business with fewer employees.

Artificial intelligence will become a core driver of cost reduction, efficiency gains, and faster research and development.

The automaker plans to roll out AI technology more comprehensively across the group, empowering vehicle development, raw material procurement, marketing, and after-sales operations.

BMW announced the strategy at an investor event on Wednesday. The company said that efficient use of artificial intelligence can improve the group's flexibility and execution efficiency, which requires fewer management layers and a reorganization of business units.

BMW said that to streamline its structure, the number of business units and management positions will be cut by 20% in the coming months, and "subordinate organizational levels will be reduced by a comparable magnitude."

A person familiar with the matter previously said that executives reached a large-scale personnel restructuring agreement with labor representatives in July, affecting up to 8,000 white-collar workers in Germany. As of the end of 2025, BMW's total global workforce was slightly below 155,000.

CEO Milan Nedeljkovic said in a statement at Wednesday's event: "We are optimizing our organizational structure and cost base to respond to increasingly fierce competition in the industry over the next few years. The personnel restructuring plan is an important lever for achieving this goal."

German automakers are pushing hard on cost reduction. Intense competition in China's core market and a shrinking market size are creating enormous pressure; at the same time, persistently high energy costs, combined with the Trump administration's tariff policies, continue to erode corporate profits.

BMW said on Wednesday that the group must significantly increase its overall speed and efficiency, with the goal of raising the earnings before interest and taxes margin of its automotive business to the 8%-10% range by the beginning of the next decade. In 2025, that margin was only 5.3%. BMW expects the margin to be difficult to improve in the short term, maintaining a target of 3%-5% in 2028.

Other plans announced on Wednesday include focusing on the most profitable models in each key market while creating more customized models tailored to Europe, the United States, and China; and streamlining model derivative versions to improve profitability.

In the Chinese market, BMW plans to expand local production of models aimed at domestic consumers; imported models will be limited to high-margin versions; and the company is considering exporting more China-made cars to Southeast Asian markets.

BMW added that it may launch a high-end sport utility vehicle in the U.S. market designed specifically for local consumers. Such models combine the space of a traditional SUV with sporty handling, and have been well received by the market.

BMW's Spartanburg plant in South Carolina produces the X3, X5, X6, X7, and XM series sport utility vehicles and coupe models, most of which are for export. The company said these models sell well globally, the plant is currently operating at full capacity, and the company is considering expanding production of these models in other markets.

In the European market, BMW will launch a new compact model based on the Neue Klasse platform, the technical foundation for next-generation intelligent vehicles with high software computing power.

Nedeljkovic added: "Against an increasingly severe external environment, we have already formulated measures to adjust ourselves and will vigorously push forward their implementation."

BMW said that a large number of supporting measures are still under evaluation, and relevant decisions are expected to be made in the spring of 2027.