BMW Group is preparing to enter discussions with employee representatives as the German automaker contends with a fresh profit warning, weakening China sales and rising costs tied to the Iran war.
A Reuters report has revealed that the automotive giant will be setting up talks in the form of a works council in the coming weeks, although while challenges have been acknowledged, no specific mitigation measures have been outlined at this time.
It has been announced that by the end of the year, BMW will have reduced its global workforce by five per cent, equating to around 7,700 jobs worldwide. This comes of the back of news earlier this month of BMW lowering its financial outlook for 2026 – with earnings before interest and taxes (EBIT) margin expected to come in at 1-3%, compared with prior guidance of 4-6% – citing a worsening passenger vehicle market in China and the broader economic impact of the conflict in the Middle East.
BMW said group profit before tax is expected to decline significantly from the previous year, a sharper drop than the moderate decrease previously anticipated.
MW’s shares plunged to a near six-year low following the announcement, in which new CEO Milan Nedeljkovic vowed to intensify structural cost-cutting. A company spokesperson told Reuters that these reductions would continue to occur through natural attrition rather than layoffs.
The UK remains significant for BMW because of the MINI brand and manufacturing presence at MINI Plant Oxford. The profit warning itself has not indicated any announced changes to UK production. However, if BMW’s cost-cutting programme deepens over the next year, it’s possible that all manufacturing locations will come under scrutiny. At present, there has been no indication that UK plants are the primary focus.
More on this story as it develops.
For more articles like this, visit our Leadership channel