BMW warns on profits, prepares talks on possible job cuts

BMW’s latest profit warning landed as a sharp reminder that Europe’s carmakers are still caught between shrinking margins, costly electrification and rising labor tension. The German premium group is preparing talks with employee representatives while it steps up efficiency measures, a sign that the industry’s squeeze is moving from boardrooms into factory and union negotiations.

The company’s shares fell about 7% to their lowest level since late 2020 after the warning, while BMW cut its operating auto margin target to 1% to 3%, down from 4% to 6%. The outlook reflected weaker demand in China, the world’s biggest car market, and cost pressure linked to the Iran war, adding to the strain already facing a sector trying to fund battery plants, software systems and new model lines.

BMW said workforce reductions would continue through natural attrition rather than layoffs, but the scale of the adjustment remains significant. The company has said it expects a global workforce reduction of up to 5% by the end of 2026, equal to as many as 7,700 jobs from a workforce of 154,540 at the end of 2025. A works council spokesperson said talks were being prepared and that the immediate goal was to work on viable solutions through dialogue and responsibility toward employees.

The pressure comes after BMW posted profit before tax of €10.2 billion on revenues of €133.5 billion in 2025, while selling 2.46 million passenger vehicles worldwide. Its production network spans more than 30 sites, and its sales reach covers more than 140 countries, meaning any restructuring would ripple across Germany, Europe, North America and China. BMW has also said it is considering capacity reductions, and analysts expect the company could outline cuts of 10% to 15% at its capital markets day later this year.

BMW is not alone in confronting a tougher European auto market. Volkswagen and Mercedes-Benz have already moved toward more sweeping redundancy plans, underscoring how a once-dominant industry is being forced to defend profits while repositioning for an electric future. For BMW, the immediate question is how fast it can reshape its manufacturing footprint without deepening damage to workers, suppliers and the wider industrial base that still depends on Germany’s carmakers.