BMW targets shedding 20% of managers through AI in savings push

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomeTransportationAutosBMW targets shedding 20% of managers through AI in savings pushIn July, BMW reached a deal to reduce white-collar positions in GermanyAuthor of the article:The logo of BMW is pictured during the New York International Auto Show on March 23, 2016. Photo by AFP PHOTO / Jewel SAMADJEWEL SAMAD/AFP/Getty ImagesBMW AG is planning to deploy artificial intelligence to help eliminate a fifth of management roles by the middle of next year, part of an agreed buyout plan designed to slash costs and boost profitability.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThe cuts will come from reducing some divisions and management roles associated with them, BMW said Wednesday. This will feed through lower levels, the luxury-car maker added, as it aims to become more agile “through the efficient use of artificial intelligence.”This advertisement has not loaded yet, but your article continues below.In July, BMW reached a deal to reduce white-collar positions in Germany. The plan targets shedding some 8,000 positions, people familiar with the situation said at the time, about five per cent of the manufacturer’s global workforce. The push for voluntary departures comes as BMW grapples with a slump in China and fallout from the Middle East conflict.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try again“We are improving our structures and cost base so we can meet the increasingly fierce competition that will define this industry in the coming years,” Chief Executive Officer Milan Nedeljkovic said in a statement.BMW is the latest large company to replace senior staff with AI. United Parcel Service Inc. slashed 12,000 managers, with AI ensuring those jobs won’t return, while German airline Deutsche Lufthansa AG outlined plans to cut 4,000 administrative jobs by the end of the decade to boost profitability.AI will help streamline “leadership structures through a 20 per cent reduction” of BMW’s senior vice presidents and the “corresponding consolidation of management structures,” the company said in a presentation.This advertisement has not loaded yet, but your article continues below.Still, BMW is being unusually open about AI’s role in the job cuts. Many companies remain hesitant to give AI as a reason for cuts to avoid fear-mongering.“Consistent use of agentic AI applications across all areas of the company will be a game-changer for more agile and efficient development, leaner structures and faster decision-making,” BMW Chief Financial Officer Walter Mertl said.BMW announced the plans at its capital markets day, the first chance for Nedeljkovic to convince investors of steps to revive profits at the world’s largest luxury automaker. The former BMW trainee became CEO in May.The company had largely avoided the worst of its rivals’ woes related to a downturn in China. But in June, BMW stunned investors with a profit warning, saying margins could slip to as low as one per cent this year.BMW said Wednesday it’s aiming to be back within its long-term auto-margin target of eight per cent to 10 per cent by the start of the next decade. The manufacturer, which also owns the Mini and Rolls-Royce brands, expects returns of between three per cent and five per cent as an interim step in 2028.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.In response to the challenges, Nedeljkovic has been seeking savings. As well as cutting jobs, BMW pulled out of next month’s Paris car show “due to a shift in priorities.”He’s also rejigging the lineup to fit customer preferences in different parts of the world, including China, where consumers are increasingly buying local brands such as BYD Co.The company is planning a new entry-level electric car for Europe and a high-end sport utility vehicle for the US.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.