Daily Management Review

BMW to downsize 6,000 employees, stop cooperation with Daimler on drones


German carmaker Bayerische Motoren Werke AG (BMW) announced its intention to cut 6,000 jobs due to the negative consequences of the COVID-19 coronavirus pandemic.

Under the plan, the company, in addition to dismissals, will offer employees an opportunity of earlier retirement, and will also not extend temporary contracts or fill open vacancies.

In addition, BMW will suspend cooperation with Mercedes-Benz (part of Daimler) as part of a joint venture to develop technology for self-driving cars, MarketWatch reports. It was created in early 2019.

BMW currently employs about 126,000 people worldwide. The company used a shortened working day scheme in which the German government partially pays employees wages for “lost” hours. In May, BMW said that more than 30 thousand people were working under this scheme.

However, on Friday, the company said it needed to take further action because of the coronavirus pandemic and its consequences. A BMW spokesman noted that almost all 6 thousand job cuts will fall on Germany.

Car sales have fallen in recent months, and major industry players have been forced to close production due to the outbreak and the restrictive measures associated with it. In Germany, sales of new cars collapsed by 50% in May compared to the same month last year, including sales of Volkswagen, BMW and Daimler halving. In general, in the European Union, new car registrations fell 52% last month after falling more than 78% in April.

source: marketwatch.com