Severance costs could run into the hundreds of millions of euros. Management's calculation is that this is still cheaper than continuing to pay staff who, in Nedeljković's own words to employees, are no longer "mission-critical" now that the industry's underlying rules have "substantially changed." The savings target is concrete: around €1 billion annually starting in 2028.
What makes this announcement feel different from a routine cost exercise is its timing. It lands exactly one month after BMW issued its first profit warning of the year — its third in three years. In that warning, BMW slashed its automotive division's operating margin guidance from a 4%-6% range down to just 1%-3%, and cut its return-on-capital-employed target from 6%-10% to 1%-5%.
Run a quick simulation to see what that actually means. If BMW sells a car for €50,000 at a 5% margin, that's roughly €2,500 in profit per unit. Drop the margin to 2%, and profit on that same car falls to about €1,000 — a 60% collapse without selling a single fewer vehicle. That means the company either needs to sell dramatically more cars, or cut costs aggressively, just to hold absolute profit steady at prior-year levels. The 8,000 job cuts are part of that cost-cutting push.