German car manufacturers are undergoing substantial job cuts, primarily impacting administrative and development positions, as they face intensified competition from China and a challenging global market. BMW announced plans to eliminate up to 8,000 jobs globally, representing about 5% of its 154,000-strong workforce, through natural attrition and voluntary redundancy programs by the end of 2027. These cuts are expected to save approximately $1.13 billion annually from 2028 and will mainly affect operations in Germany, particularly Munich. This decision followed a warning of a "significant decline" in profit after a 35% drop in second-quarter net profit to $1.4 billion.
Volkswagen, Europe's largest carmaker, has doubled its job reduction program, aiming to slash up to 100,000 positions. Porsche, a Volkswagen subsidiary, plans to cut an additional 5,000 jobs in Germany by 2035, primarily in administration and management, which accounts for about 20% of its workforce. These new cuts are in addition to the 3,900 jobs already eliminated last year, with an expectation of mid-three-digit million euro annual cost reductions.
Mercedes-Benz has also been implementing austerity measures, with more than 5,000 administrative employees leaving through severance packages since an austerity program began in 2025. The company recently wrote off over $700 million due to intense market conditions. Overall, the German auto industry saw a reduction of nearly 50,000 employees, or 6%, in Germany last year, reaching its lowest level since 2011. Analysts like Stefan Bratzel of the Center of Automotive Management emphasize that these aren't just minor cuts but are crucial for the survival of the German auto industry, urging a focus on new technologies and labor cost reductions.
