UK markets closed
  • FTSE 100

    5,860.28
    +74.63 (+1.29%)
     
  • FTSE 250

    18,109.57
    +215.15 (+1.20%)
     
  • AIM

    980.45
    +11.44 (+1.18%)
     
  • GBP/EUR

    1.0988
    -0.0074 (-0.67%)
     
  • GBP/USD

    1.3038
    -0.0042 (-0.32%)
     
  • BTC-GBP

    9,952.61
    +65.06 (+0.66%)
     
  • CMC Crypto 200

    260.05
    -1.40 (-0.54%)
     
  • S&P 500

    3,465.39
    +11.90 (+0.34%)
     
  • DOW

    28,335.57
    -28.09 (-0.10%)
     
  • CRUDE OIL

    39.78
    -0.86 (-2.12%)
     
  • GOLD FUTURES

    1,903.40
    -1.20 (-0.06%)
     
  • NIKKEI 225

    23,516.59
    +42.32 (+0.18%)
     
  • HANG SENG

    24,918.78
    +132.65 (+0.54%)
     
  • DAX

    12,645.75
    +102.69 (+0.82%)
     
  • CAC 40

    4,909.64
    +58.26 (+1.20%)
     

BMW to cut 6,000 jobs as part of cost-saving push

Jill Petzinger
·Germany Correspondent, Yahoo Finance UK
·2-min read
11 June 2020, Saxony, Leipzig: At the end of the production line, an employee walks over the last BMW i8 with a cloth. Six years after its market launch, the last plug-in hybrid sports car has rolled off the assembly line here. A total of 20 488 of these cars were produced at the Leipzig plant. This makes the hybrid sports car with electric and gasoline engines by far the best-selling sports car at BMW. The vehicle with a passenger cell made of carbon-reinforced plastic (CFRP) won numerous awards. In addition to vehicles with combustion engines, BMW also builds the electric model i3 in Leipzig. Photo: Jan Woitas/dpa-Zentralbild/dpa (Photo by Jan Woitas/picture alliance via Getty Images)
Six years after its market launch, the last-ever BMW i8 car rolls off the assembly line in the BMW plant in Leipzig, Germany on 11 June. (Jan Woitas/Picture Alliance via Getty)

German premium carmaker BMW (BMW.DE) confirmed it will cut 6,000 jobs in Germany in an effort to cut costs, as the automotive sector struggles to recover from the coronavirus lockdowns and low demand for new cars.

German business daily Handelsblatt reported that BMW management and its works council agreed the workforce reduction will be achieved via a mixture of redundancies, early retirement, not renewing temporary contracts and not refilling vacancies. It is the first time BMW has had to downsize since the 2008 financial crisis.

BMW had said last year that it planned to cut 6,000 jobs by 2022.

The Bavarian automaker, which employs 126,000 people globally, had put some 34,000 staff onto short-hours work as production came to a halt in March after plants were forced to close as part of the nationwide shutdown to contain the spread of COVID-19.

However, BMW, like its rivals VW (VOW3.DE) and Daimler, (DAI.DE) began slowly ramping up production again in the middle of May. The challenge they face now is that car sales have collapsed as customers avoid big-ticket purchases in uncertain times.

Volkswagen-owned Audi announced in November 2019 that it will cut 9,500 jobs in Germany up until 2025, as part of overhaul of the company. Daimler is also planning big job cuts of up to 15,000.

New car registrations across the European Union as a whole plunged by over 52% in May from the same month in 2019. That was a slight improvement from the 73% drop in April, but no consolation to carmakers desperate to get their production lines running at full capacity again.

READ MORE: New car sales in the European Union plunge over 50% in May

According to the German Automotive Industry Association, only 1.18 million cars were produced between January and May, a drop of 44%, or nearly a million vehicles from the same five-month period in 2019.

Ferdinand Dudenhöffer, director of the Center for Automotive Research in Germany, said this week that key global car markets won’t recover for several years, which will stifle German car production and could mean the loss of 100,000 jobs across automotive and supplier companies in the country in the next three-to-four years.