Retirement instead of layoffs: Another car giant in Germany has run into difficulties
Unlike Volkswagen, which announced possible layoffs of up to 100,000 employees by the end of the decade, BMW is promoting a voluntary retirement plan that will include grants and favorable conditions. The move is intended to reduce costs after a 44% drop in the company's profits in 2025.
The German automotive giant BMW intends to encourage the departure of about 8,000 employees in the coming years in order to save costs and remain profitable; this is reported this morning (Wednesday) by media outlets in Germany. Unlike Volkswagen, which announced in June possible layoffs of up to 100,000 employees by 2030, BMW is promoting a voluntary retirement plan that will include grants and favorable conditions. The company itself has not issued an official confirmation of the matter.
According to estimates by media outlets in the country, about half of the employees who will leave will be from Germany, and the rest from the company's factories around the world. In total, about 154,000 employees work at the German company.
The German automotive industry is in a deep crisis. Competition in the field of electric vehicles from China, the decline of the Asian luxury market, rising labor costs, and international trade barriers have combined to bring about a double-digit percentage drop in revenue over the last two years.
"We cannot compete with Chinese production and prices," admitted Volkswagen CEO Oliver Blume last week, when he detailed possible plans to lay off up to 100,000 employees out of about 650,000 employees worldwide.
According to company data, Volkswagen's profit dropped by 53% in 2025 compared to the previous year; Mercedes' profit fell by 49%; and that of BMW fell by 44%. The situation since the beginning of the current year is no better. In the last two years, these companies have spent billions of euros on voluntary retirement plans that include continued salary payments for up to five years after retirement, grants, and more. Now, BMW has announced an ambitious target of about 8,000 employees who will leave either due to retirement at pension age, or due to early retirement following an agreement with management.
The new program announced will begin this coming October and will continue until the end of 2027, according to reports, and will include employees in all fields except production. Estimates of such a program were published in the media in the past, and it was apparently agreed upon in talks between the company's works council and management. According to past estimates, BMW will spend about a billion euros on the move, about 125,000 euros per employee.
