German automaker BMW has reported a sharp decline in its financial performance for the second quarter of 2026, with pre-tax profit falling by around 35% to €1.7 billion. The company also announced an accelerated restructuring program that includes thousands of voluntary job cuts and a comprehensive review of its operations as it adapts to a rapidly changing automotive market.
BMW’s new Chief Executive Officer Milan Nedeljković said the global automotive industry is facing unprecedented challenges, including intensifying competition, stricter environmental regulations, geopolitical tensions, and the costly transition to electric mobility. According to him, the company must become leaner, faster, and more efficient in order to remain competitive.
As part of the restructuring strategy, BMW plans to reduce its workforce by approximately 8,000 employees through voluntary redundancy by the end of 2027. Most of the reductions are expected to affect administrative and development departments, while production facilities are largely expected to remain unaffected.
One of the main reasons behind the weaker financial results is the significant slowdown in China, the world’s largest automotive market. BMW’s sales in China declined by about 30%, as domestic Chinese manufacturers continue to gain market share, particularly in the fast-growing electric vehicle segment.
The company also plans to streamline its product portfolio, reduce costs in research, procurement, and sales, and better adapt its model lineup to regional market conditions. BMW noted that the transition to electric vehicles is progressing at different speeds around the world, with China leading adoption while demand for internal combustion vehicles remains relatively strong in the United States and several other markets.
BMW is not alone in taking such measures. Other major European manufacturers, including Volkswagen, Mercedes-Benz, and Porsche, have also launched cost-cutting and restructuring programs in response to weaker demand, rising production costs, and growing competition from Chinese automakers.
Despite the challenging environment, BMW reaffirmed its full-year financial outlook and said it would continue investing heavily in next-generation electric vehicles, battery technologies, digital platforms, and software development while improving overall efficiency.
Sources: Reuters, BMW AG.
