BMW is expanding its use of artificial intelligence to accelerate vehicle development as it invests more heavily in software-defined vehicles, a shift that will also bring significant workforce reductions. The automaker aims to reduce the number of divisions and management positions by 20% by the middle of next year, with an estimated 8,000 jobs expected to be displaced.
The changes reflect BMW’s plan to use AI across multiple stages of vehicle development while streamlining its organizational structure. The company has also agreed to offer voluntary severance packages, with some employees reportedly eligible for payments of up to €650,000, or nearly $730,000.
How BMW Plans to Use AI in Vehicle Development
BMW intends to rely more heavily on AI as it develops its next generation of vehicles. The technology will be used during the early stages of development, helping engineers save time and reduce trial and error with full-size prototypes.
Beyond establishing initial technical requirements, AI is expected to support virtual road tests, crash testing and even the release process. Human employees will continue to check and monitor the work before prototypes move on to real-world testing.
The expanded use of AI is part of BMW’s broader move toward software-defined vehicles, which requires substantial resources to keep pace with the rapid rate of technological development.
BMW Plans Organizational Cuts by 2027
Alongside its increased reliance on AI, BMW plans to significantly reduce its workforce before the end of 2027. The BMW Group reached an agreement with its Works Council in July outlining the changes and the voluntary severance package for employees.
The company said it would reduce the number of divisions and associated management roles by 20% by the middle of next year, with a comparable reduction at lower organizational levels.
The planned restructuring is expected to displace an estimated 8,000 jobs. The voluntary severance offer is intended to provide employees with an option to leave the company under the terms of the agreement.
BMW Severance Packages Could Reach €650,000
The severance offer has reportedly attracted considerable interest because of its potential value. Payments could reach €650,000, equivalent to nearly $730,000.
Employees can receive the payment as a lump sum or in monthly installments. Those aged 55 and older are also entitled to retirement benefits.
The package includes an option to purchase the employee’s company car, presumably at a depreciated price. Employees in higher pay grades can purchase two vehicles if they choose.
BMW will also provide recommendation letters for employees seeking opportunities outside the company, offering additional support as they pursue new jobs.
BMW Restructuring Extends Beyond Workforce Reductions
The restructuring involves more than job cuts. BMW is also streamlining its vehicle lineup, meaning some niche models could take a long time to return, if they return at all.
The automaker is committing resources to AI-driven development while offering substantial severance packages to employees leaving under the voluntary program. The changes combine a leaner organizational structure with a revised approach to vehicle development and the company’s model range.
