BMW to Cut 20% of Management Roles as AI Reshapes the Company
BMW plans to eliminate 20% of its divisions and associated management roles by mid-2027 as the automaker expands artificial intelligence and restructures its operations to improve profitability.
BMW is preparing to significantly reduce its management structure as part of a broader restructuring designed to lower costs and make the German automaker more competitive. The company said it plans to cut the number of divisions and associated management positions by 20% by the middle of 2027, with comparable reductions expected at lower organisational levels. The move comes as BMW faces weaker demand in China, tougher competition from Chinese automakers and pressure from US tariffs.
Artificial intelligence will play an important role in BMW’s restructuring. The company intends to expand AI throughout its value chain, including vehicle development, purchasing, production, sales and aftersales operations. BMW expects AI to eventually provide support across processes ranging from establishing technical requirements to testing and releasing products, allowing the company to reduce administrative complexity and make decisions more quickly.
The management reductions are separate from BMW’s previously announced voluntary redundancy programme, which could eliminate around 8,000 jobs in Germany by the end of 2027. That programme primarily targets administrative and development positions, while BMW has said production jobs in Germany will not be cut. The company has reached an agreement with its works council and plans to begin offering voluntary buyouts in October.
BMW is making the changes as profitability comes under significant pressure. The automaker expects an automotive operating margin of only 3% to 5% in 2028, before returning to its longer-term target of 8% to 10% in the early 2030s. BMW has also announced plans to simplify its vehicle portfolio, expand local production in China and develop products more specifically for individual regional markets.
The restructuring illustrates how AI is increasingly becoming part of corporate cost-cutting strategies rather than simply a technology investment. For BMW, the goal is not only to reduce the number of management layers but also to use automation and AI-powered systems to make a large global organisation more agile. The company expects further decisions on efficiency measures by spring 2027, meaning additional changes could follow as BMW evaluates how effectively its new structure improves productivity and profitability.
