BMW to cut 20% of senior management roles with AI as it pushes for cost savings
BMW said AI will play a key role in streamlining its leadership structure.
- Oct 1, 2026,
- Updated Oct 1, 2026 1:45 PM IST
BMW AG plans to use artificial intelligence to eliminate about 20% of its senior management roles by the middle of next year, as the German luxury carmaker looks to cut costs, simplify its management structure and improve profitability, Bloomberg reported on Wednesday.
The cuts will come from trimming some divisions and management roles, BMW said on Wednesday.
The company said the changes will also feed down to lower levels as it seeks to become more agile “through the efficient use of artificial intelligence.”
BMW has roughly 65 senior vice presidents who report directly below the board, along with another level of about 400 senior positions, according to a person familiar with the company’s structure. This means about 100 high-level jobs are set to be eliminated.
“Leadership structures through a 20% reduction” of BMW’s SVPs and the “corresponding consolidation of management structures” will be part of the plan, the company said in a presentation.
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Most of the affected positions are in Munich, Chief Executive Officer Milan Nedeljkovic said at a media briefing.
AI to reshape management structure
BMW said AI will play a key role in streamlining its leadership structure. Chief Financial Officer Walter Mertl said the company plans to use agentic AI applications across its operations.
“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,” Mertl said.
BMW is also planning wider job cuts. In July, the company reached a deal to reduce white-collar positions in Germany. The plan targets shedding about 8,000 positions, or around 5% of the manufacturer’s global workforce, people familiar with the situation said at the time.
The voluntary departures come as BMW deals with a downturn in China and the fallout from the Middle East conflict.
BMW is among a growing number of large companies openly linking AI to job cuts. United Parcel Service Inc. slashed 12,000 managers, with AI ensuring those jobs won’t return, while German airline Deutsche Lufthansa AG has outlined plans to cut 4,000 administrative jobs to reduce costs.
BMW has been unusually open about the role of AI in its workforce reduction, as many companies remain hesitant to directly cite AI as a reason for job cuts because of concerns about fear-mongering.
BMW targets return to higher margins
The company announced the plans during its capital markets day, giving Nedeljkovic his first opportunity to convince investors of measures to revive profits at the world’s largest luxury automaker. The former BMW trainee became CEO in May.
BMW had largely avoided the worst of the problems faced by rivals during the downturn in China. However, in June, the company issued a profit warning, saying its margins could fall to as low as 1% this year.
BMW said on Wednesday that it aims to return to its long-term auto-margin target of 8% to 10% by the start of the next decade. It expects returns of 3% to 5% as an interim step in 2028.
Alongside job cuts, Nedeljkovic is also reshaping BMW’s business and product strategy. The company has pulled out of next month’s Paris car show “due to a shift in priorities.”
BMW is also adjusting its product lineup to better match customer preferences in different markets, including China, where consumers are increasingly buying local brands such as BYD Co.
The company plans to target some of the world’s wealthiest buyers with more models positioned between its BMW and Rolls-Royce brands. This would likely put it in competition with vehicles such as Mercedes-Benz Group Co.’s Maybach sedan.
BMW also plans to launch a new entry-level electric car for Europe and a high-end sport utility vehicle for the US. At the same time, it will stop producing models such as the 2-Series Active Tourer and the diesel version of its 3-Series sedan as it looks to reduce complexity.
BMW AG plans to use artificial intelligence to eliminate about 20% of its senior management roles by the middle of next year, as the German luxury carmaker looks to cut costs, simplify its management structure and improve profitability, Bloomberg reported on Wednesday.
The cuts will come from trimming some divisions and management roles, BMW said on Wednesday.
The company said the changes will also feed down to lower levels as it seeks to become more agile “through the efficient use of artificial intelligence.”
BMW has roughly 65 senior vice presidents who report directly below the board, along with another level of about 400 senior positions, according to a person familiar with the company’s structure. This means about 100 high-level jobs are set to be eliminated.
“Leadership structures through a 20% reduction” of BMW’s SVPs and the “corresponding consolidation of management structures” will be part of the plan, the company said in a presentation.
Don't Miss: Who is Anup Kumar Saha, the new MD and CEO of Kotak Mahindra Bank?
Most of the affected positions are in Munich, Chief Executive Officer Milan Nedeljkovic said at a media briefing.
AI to reshape management structure
BMW said AI will play a key role in streamlining its leadership structure. Chief Financial Officer Walter Mertl said the company plans to use agentic AI applications across its operations.
“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,” Mertl said.
BMW is also planning wider job cuts. In July, the company reached a deal to reduce white-collar positions in Germany. The plan targets shedding about 8,000 positions, or around 5% of the manufacturer’s global workforce, people familiar with the situation said at the time.
The voluntary departures come as BMW deals with a downturn in China and the fallout from the Middle East conflict.
BMW is among a growing number of large companies openly linking AI to job cuts. United Parcel Service Inc. slashed 12,000 managers, with AI ensuring those jobs won’t return, while German airline Deutsche Lufthansa AG has outlined plans to cut 4,000 administrative jobs to reduce costs.
BMW has been unusually open about the role of AI in its workforce reduction, as many companies remain hesitant to directly cite AI as a reason for job cuts because of concerns about fear-mongering.
BMW targets return to higher margins
The company announced the plans during its capital markets day, giving Nedeljkovic his first opportunity to convince investors of measures to revive profits at the world’s largest luxury automaker. The former BMW trainee became CEO in May.
BMW had largely avoided the worst of the problems faced by rivals during the downturn in China. However, in June, the company issued a profit warning, saying its margins could fall to as low as 1% this year.
BMW said on Wednesday that it aims to return to its long-term auto-margin target of 8% to 10% by the start of the next decade. It expects returns of 3% to 5% as an interim step in 2028.
Alongside job cuts, Nedeljkovic is also reshaping BMW’s business and product strategy. The company has pulled out of next month’s Paris car show “due to a shift in priorities.”
BMW is also adjusting its product lineup to better match customer preferences in different markets, including China, where consumers are increasingly buying local brands such as BYD Co.
The company plans to target some of the world’s wealthiest buyers with more models positioned between its BMW and Rolls-Royce brands. This would likely put it in competition with vehicles such as Mercedes-Benz Group Co.’s Maybach sedan.
BMW also plans to launch a new entry-level electric car for Europe and a high-end sport utility vehicle for the US. At the same time, it will stop producing models such as the 2-Series Active Tourer and the diesel version of its 3-Series sedan as it looks to reduce complexity.