BMW Slashes Profit Outlook and Prepares Thousands of Layoffs as Chinese Car Sales Collapse
Published on 06/17/2026 at 22:54 | Redaktion boerse-global.de
Thousands of BMW employees are facing job losses as the luxury automaker embarks on a sweeping restructuring. The company expects to cut between one and five percent of its global workforce of roughly 155,000, which translates into several thousand positions. The move follows a reduction of about 3,000 jobs already carried out in 2025, predominantly in Germany and China.
BMW announced a dramatic downward revision of its 2026 forecast on the same occasion. Pre-tax profit is expected to fall by at least ten percent, with delivery volumes also declining. To counter the slide, the company plans deep structural and efficiency measures, incurring one-time charges of approximately one billion euros in the second half of the year alone.
The works council reacted with alarm and demanded immediate clarity from new CEO Milan Nedeljkovic on the scope and timing of the planned cuts. Nedeljkovic took over the top post only in May 2026 and now faces a massive restructuring from the start.
The root causes of BMW’s troubles lie chiefly overseas. In China, car sales plunged 22 percent in May compared with the same month last year. For the first five months of 2026, the decline stands at 20 percent. The drop hits combustion-engine models hardest, while vehicles with new-energy powertrains (NEV) now account for more than 60 percent of the Chinese market. Soaring gasoline prices triggered by geopolitical tensions in the Middle East and China’s lingering real-estate crisis are further depressing consumer demand. Industry experts warn that European premium brands can no longer compete on price in China’s compact segment and need to radically rethink their strategies and supply chains.
Responding to the bleak outlook, JPMorgan analysts lowered their price target for BMW shares on June 17 from 100 euros to 82 euros. They expect more details on possible capacity reductions at European plants to emerge during the group’s Capital Markets Day in October.
BMW is not alone in its predicament. The entire German automotive sector is under severe pressure. At Volkswagen’s Osnabrück plant, production of the T-Roc Cabriolet has been throttled back, leading to extended factory holidays followed by a four-day week for some 2,000 employees. According to an internal survey, a majority of VW board members now assess the situation as an existential threat to the company.
A separate consumer study for the second quarter of 2026 confirms the tough market conditions. While roughly 65 percent of German consumers surveyed still intend to buy a new or demonstration vehicle, the overall willingness to purchase a new car dropped six percentage points compared with a year earlier. Price remains the single most important factor. For electric vehicles, potential buyers are put off by long charging times, high costs, and insufficient charging infrastructure. Chinese brands are gaining ground thanks to technological advantages and lower prices, though they continue to struggle with customer trust in reliability and safety.
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