BMW makes five
BMW on Wednesday became the fifth German carmaker to announce major job cuts as the country’s auto sector seeks to deal with growing competition from China.
The Munich-based firm said it would cut 8,000 jobs globally, about 5% of its 154,000-strong workforce.
BMW, which also owns the Mini and Rolls-Royce brands, said the job losses would mainly affect operations in Germany and would be achieved through natural staff turnover and a voluntary redundancy programme.
Although BMW was considered more resilient to Chinese competition, the company warned last month that its sales in China were falling sharply.
Chinese rivals have stepped up competition for electric vehicles (EVs), which has crushed BMW’s sales volume and pricing power.
Last year, BMW’s vehicle deliveries in China fell to their lowest level since 2017 and in the three months to June, they fell 30% year-on-year.
US President Donald Trump’s tariffs have also contributed to BMW’s troubles, as well as higher energy prices from the Iranian war and the rise of Chinese EV makers in other key markets, including Europe, Asia Pacific and Latin America.
On Thursday, the company disclosed that second-quarter net profit fell 35% to €1.2 billion ($1.4 billion), while revenue fell to €31 billion from €34 billion.
BMW has adjusted its guidance for the rest of the year, warning of a “significant decline” in profit.
Even Porsche is not untouched by this
Two days earlier, Porsche announced plans to cut an additional 5,000 jobs in Germany by the end of 2035. This figure represents approximately 1 in 5 employees
The sports performance brand said the new measures would affect Porsche’s main production plant in Stuttgart-Zuffenhausen and its research and development (R&D) center in nearby Weissach.
Last year, Porsche announced a restructuring program to cut 1,900 jobs in the Stuttgart region by 2029 and allow it to eliminate 2,000 fixed-term contracts.
The company will also defer salary increases, while performance bonuses will be more closely linked to profits.
Porsche, which is owned by Volkswagen Group but run with a high degree of independence, has also cut jobs at its Leipzig plant and is closing three subsidiaries that employ about 500 people.
At the end of last year, Porsche employed about 41,800 people, about 85% of whom were in Germany.
Volkswagen plans its deepest cuts
Volkswagen, Europe’s biggest carmaker, doubled down on its job-elimination program last month and announced plans to cut 100,000 jobs.
The company also wants to close four German factories.
Unions and the German state of Lower Saxony, which has a 20% voting share and can veto key decisions, have rejected the latest plans. VW originally said it would cut 50,000 positions.
VW is famous for its large workforce of 630,000 globally – 680,000 including Chinese joint ventures.
Despite making the same number of vehicles, the Wolfsburg-based giant employs about 60% more workers than Toyota.
Once a sign of German industrial strength, the huge workforce has become a costly burden amid growing competition from Chinese EV makers.
VW controls more stages of domestic production than rivals, increasing labor demands, while German factory costs are often twice as high as rivals.
Slow progress on electric vehicles further depressed sales in China, which once accounted for a third of VW’s total sales, as well as in Europe.
Mercedes trims without mass firing
In March last year, Mercedes-Benz agreed its works council’s plan to deliver savings of €5 billion by 2027.
However, the company ruled out compulsory redundancies in German plants, insisting that improvements could be achieved by voluntary departures.
As of March this year, about 5,500 administration, R&D and IT employees accepted severance packages and left. Production workers remain safe.
Additional headcount cuts have been reported in the company’s China operations.
Last month, Mercedes postponed bonus payments for about three-quarters of its German workforce until 2027 and proposed increasing the working week to 35 to 40 hours without additional pay.
Mercedes bosses also hinted that some jobs could be moved abroad.
On Tuesday (28 July) Mercedes said it had written off more than €700 million due to tough competition in China.
Although second-quarter net profit rose 13.5% to €1.09 billion, core income at its flagship car division fell by a quarter to €909 million.
Audi’s premium brand is under pressure
VW-owned Audi last year announced plans to cut 7,500 jobs in Germany by the end of 2029.
The company has rejected compulsory redundancies and said job losses in administration and R&D would be made up through voluntary schemes and early retirement.
However, last month Audi’s Neckarsulm plant was listed by parent company VW for possible closure in 2030. This may affect about 15,000 employees.
The site, which makes the A5, A6 and A8, has already cut production from 300,000 to 225,000 vehicles a year.
Edited by: Rob Mudge