German luxury carmaker BMW is preparing for a major organizational overhaul as it expands the use of artificial intelligence across its operations. The company plans to reduce the number of divisions and associated management roles by 20% by mid-2027. BMW will also make comparable reductions at lower organizational levels.
BMW expects AI-based systems to accelerate development and streamline processes that currently require multiple organizational layers. The company wants to use AI more extensively to support activities ranging from technical requirements and testing to product release.
The restructuring forms part of a wider strategy to simplify decision-making, improve efficiency and strengthen profitability. BMW said, “AI will play a growing role across its value chain, from vehicle development and purchasing to production and aftersales operations.”
The strategy reflects the broader shift among global automakers towards automation and software-driven operations. For BMW, the move comes as it faces rising competition, particularly in China, alongside pressure from tariffs and the costly transition towards electric vehicles.
The management restructuring comes alongside a previously announced workforce reduction program. BMW plans to eliminate around 8,000 jobs, primarily across administrative and other back-office functions. The program is being implemented through voluntary severance arrangements and natural attrition.
The company further explained, “The German production workforce is not the focus of these reductions. Instead, BMW continues to invest in domestic manufacturing and battery production as it prepares for its next generation of vehicles.” The automaker is also reshaping its product strategy. It plans to introduce a new entry-level electric vehicle in Europe and a large SUV positioned above the existing X7 in the US market.
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