Even though BMW launched a number of new models last week, the German company is also feeling a hit from the current Coronavirus crisis. According to a new report from Automotive News Europe, the Munich high wigs decided to cut some jobs, in order to reduce costs.
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BMW is apparently dropping 5,000 jobs and it looks like it won’t be an easy task as various union deals might get in the way.
Allegedly, the news broke out when an internal company message from BMW CFO Nicolas Peter was leaked to the press. While initially, some people thought this was just another fake report, BMW confirmed its authenticity later on.
Measures have been put in place to reduce working hours and placing workers on unpaid leaves, to try and keep everyone on board but, according to the CFO, it won’t be enough.
Therefore, the company will offer early retirement packages for those who are willing to take them, according to the aforementioned report. In normal conditions, this wouldn’t be an issue, as BMW will typically see over 5,000 people leave the company of natural comings and goings.
Yet, the current economic downturn has made people a lot less willing to drop their current job and venture into the unknown. Therefore, some more benefits might be needed to keep the organization slim.
This is another hit BMW is taking, like many other car makers, during these days. The company saw its sales diminish to record lows due to the lockdown, with dealers closing their gates in major markets throughout the month of April. The weak demand that is expected to follow for on the short and medium term might make recovery a long and arduous process.
BMW already announced that the profit outlook for this year has dramatically changed and that second-quarter sales are expected to be looking bleak.