BMW Stock Drops as Automaker Unveils AI and Job Cut Plan

TLDR

• BMW unveiled a restructuring plan on Wednesday built around AI, management cuts and new models.
• The automaker will cut divisions and management roles by 20% by mid-2027.
• BMW stock dropped 0% on the day, sitting near its lowest level in over six years after falling more than a third in the past year.
• The company targets automotive margins of 3% to 5% by 2028, rising to 8% to 10% by the early 2030s.
• Plans include a new entry-level EV for Europe and a luxury SUV built for US buyers.

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BMW (BMWG) stock slipped slightly on Wednesday as the German automaker laid out a sweeping recovery plan at an investor event in Bavaria. The stock has fallen more than a third over the past year and sits near its lowest level in six years.

Bayerische Motoren Werke AG, BMWYY

The plan centers on three things. Job cuts, new models, and artificial intelligence.

BMW wants to use AI to make the company leaner. The goal is fewer management layers and faster decisions across vehicle development, purchasing, sales, and aftersales.

Divisions and management roles will shrink by 20% by mid-2027. The company said a similar cut will happen at levels below management too.

This follows a deal struck in July with labor representatives. That agreement could affect up to 8,000 white-collar workers in Germany.

BMW’s global workforce stood at just under 155,000 people at the end of 2025.

Margin Targets Lag Behind Rivals

BMW set a medium-term goal of 3% to 5% automotive margins by 2028. That’s a climb from 2.3% in its most recent results.

By the early 2030s, the company wants margins between 8% and 10%. For context, the margin was 5.3% in 2025, and BMW doesn’t expect improvement before 2028.

CEO Milan Nedeljković took over the role in May after serving as production head. He called the plan a response to “increasingly fierce competition” facing the industry.

“It’s not a cost-savings programme,” he said at the event.

China remains the biggest headache. Western automakers have watched Chinese buyers switch to domestic brands in large numbers, and BMW is no exception.

The company plans to localize more production in China and lean on local partners for autonomous driving and software technology. It’s also looking at exporting China-made vehicles to Southeast Asia.

US tariffs are adding pressure too, though BMW has some shelter here. Its Spartanburg, South Carolina plant helps reduce exposure compared to some competitors.

New Models for Europe and the US

On the product side, BMW plans an entry-level EV for Europe starting in 2028. It will be built on the company’s Neue Klasse platform, which underpins its next generation of software-heavy vehicles.

For the US, BMW is eyeing a new luxury sports activity vehicle. These blend SUV space with sportier handling, and they’ve sold well for the brand already.

The Spartanburg plant currently builds BMW’s X3, X5, X6, X7, and XM models. Most of that output gets exported, and the plant is running at full capacity.

BMW is now looking at ways to expand production of these models elsewhere too.

The company isn’t alone in cutting costs. Volkswagen and Mercedes-Benz have both announced similar redundancy programs as the European auto industry deals with weak demand and tough Chinese competition.

BMW said more measures are still being evaluated. Decisions on those are expected by spring 2027.