AUTONEWS

Even the website crashed: BMW offers €650,000 per employee for voluntary departures

German luxury automaker BMW—which leads its rivals Mercedes and Audi with 2.17 million vehicles sold—aims to boost its profit margin from the current 3% to 5%. To achieve this, the company has devised a strategy that focuses not on selling more cars or raising prices, but on reducing its workforce—offering severance packages that exceed the industry average to cut labor costs.

The German manufacturer’s goal is to have 8,000 fewer employees by the end of 2027. To this end, it has established a severance package worth over €650,000 per person. This amount could be even higher if an employee leaves the company by May 31 of next year, qualifying them for what the brand calls a "Turbo Bonus." For those who depart between that date and October 31, no additional bonus is offered; however, employees who reach the age of 55 by the end of October may be eligible for discounts on the brand's vehicles.

According to the German publication *Handelsblatt*, these proposals are more competitive than the average for the German automotive sector—surpassing Volkswagen, which offers an average of around €400,000, and even Mercedes, which offers €500,000. It is no surprise, then, that the response has been overwhelming: tens of thousands of employees attempted to access the dedicated online portal, causing the website to crash.

Naturally, the severance amount is calculated based on factors including the employee’s salary, age, and length of service with the company. BMW’s new CEO, 57-year-old Serbian Milan Nedeljkovic—who joined the German manufacturer in 1993 and previously oversaw the company’s production operations before succeeding Oliver Zipse in May 2026—expects to achieve 1 billion euros in savings starting in 2028, while also projecting profit margins of between 8% and 10% beyond 2030.

$730,000...Reported BMW severance offers vary by age, salary, and tenure, with early departures and flexible payment options shaping who leaves and when.

BMW's voluntary-exit portal went live in mid-October 2026. It was quickly overwhelmed after large numbers of employees logged in to check their severance offers.

According to German reporting, the company then temporarily paused new applications after strong interest in the program.

Some of those offers reportedly top €650,000 (about $730,000). BMW wants roughly 8,000 positions gone by the end of 2027, and the numbers on the table appear to be driving the rush.

BMW has given roughly 50,000 employees access to a portal where each worker can see an individualized severance number, according to Handelsblatt. That internal site reportedly struggled under a surge of traffic shortly after launch.

The German business daily reports that it obtained a confidential sample termination agreement detailing the offer structure and listed examples where payouts topped the headline figure.

The €650,000 figure is not a standard offer. It's the high end reported in individual cases described in the leaked document, and a BMW spokesperson declined to confirm the amount when asked.

Most eligible staff should expect something well below that ceiling.

The financial and fiscal situation of the BMW Group (Bayerische Motoren Werke AG) reflects the landscape of transformation and volatility currently facing the global automotive sector. Key highlights regarding the company’s financial health, profitability, and debt structure are as follows:

1. Profit Margins and Operational Performance: Decline in Automotive Margins: Operating margins (EBIT) for the automotive division have fallen from previous peaks, settling at more moderate levels. In recent quarters, the automotive division’s margin has ranged between 2% and 5%, impacted by weak global demand, rising operating expenses, and the transition toward electromobility.

Impact of Competition and Tariffs: Operating profit has faced pressure due to intense competition in the Chinese market—where local sales have seen unprecedented declines compared to the U.S. market—as well as rising costs for materials and global automotive tariffs.

Resilience through Cost Reduction: Management has been implementing rigorous initiatives to cut operating expenses and improve production efficiency in order to offset margin compression.

2. Balance sheet and debt structure:

-Total assets: The group’s balance sheet reports global assets of approximately €273 billion.

-Debt and liabilities: The group’s total liabilities stand at around €180 billion to €190 billion (approx. US$200 billion). Long-term debt reached €74 billion in recent quarters.

-Financial Services Segment (BMW Financial Services): It is worth noting that a significant portion of the group’s consolidated debt belongs to its financial services division, which is used to fund leasing operations and automotive credit for consumers and dealerships worldwide—a standard practice among major automakers. 

3. Capital allocation and investment strategy:

-"Neue Klasse" projects: BMW continues to direct significant capital toward R&D (Research and Development) focused on its new electric architecture (Neue Klasse), next-generation batteries, and automotive software.

-Cash generation: Despite a challenging macroeconomic environment, the company maintains positive operating cash flow, supporting dividend payments and funding the energy transition without compromising short-term liquidity.

Employees get two windows to leave: March 31, 2027, or October 31, 2027. Those who commit to the earlier date reportedly qualify for an extra "Turbo Bonus" on top of their base payout, intended to thin the workforce faster.

Payment isn't one-size-fits-all, either. The program reportedly lets workers choose a lump sum, installments, contributions toward retirement savings, direct insurance payments, or some combination of those four.

The whole arrangement is set to expire on October 31, 2027, per the sample agreement in circulation.

BMW Severance Eligibility...The payout reportedly weighs a worker's salary, age, and years at the company. That's why headline figures near €650,000 apply mostly to long-tenured, higher-paid employees rather than the broader workforce getting these offers.

Age carries its own threshold. Employees who turn 55 by October 31, 2027, may qualify for benefits normally reserved for BMW retirees, adding another layer on top of whatever cash package they negotiate.

Some departing staff would reportedly keep certain BMW perks after leaving, including discounts on new and used vehicles. That detail softens the exit for employees who have spent decades buying into the brand.

The buyouts arrive as BMW pursues broader management-level cuts across the company, following the roughly 8,000 job reductions announced for completion by the end of 2027. Rivals have moved on similar timelines: Porsche has floated plans affecting 5,000 positions, while Jaguar Land Rover has run its own voluntary departure scheme.

BMW is offering severance packages of up to €650,000 (approximately US$ 730,000) in specific cases to encourage the voluntary departure of around 8,000 employees—primarily in administrative, planning, and development roles in Germany—by the end of 2027. This initiative aims to cut long-term fixed costs and restructure the company without resorting to forced layoffs.

Key drivers of the strategy:

• Market pressure and profit margins: BMW seeks to increase its operating profit margin in the automotive sector (from around 3% toward a 5% target) in the face of slowing demand in critical markets like China and intense competition from electric vehicle manufacturers.

• Efficiency and automation: With the arrival of new vehicle generations, increased use of artificial intelligence, and the need to streamline corporate hierarchies—including a 20% reduction in senior vice president positions and divisions—the company expects to save approximately €1 billion annually starting in 2028.

• Avoiding labor conflicts: Rather than implementing compulsory mass layoffs—which would face strong resistance from the works council and run up against Germany’s strict labor laws—BMW has negotiated a voluntary departure program.

How the €650,000 payment works:

• Not for everyone: The €650,000 cap applies only to rare, specific instances—involving highly senior employees with long tenures and higher salaries (with the amount calculated based on age, length of service, and total compensation). 

• "Turbo Bonus": BMW included extra incentives for those who agreed to leave sooner, with scheduled departure dates (for example, March 31 or October 31, 2027).

• Additional benefits: The package may include lump-sum or installment payments, contributions to pension or insurance funds, letters of recommendation, and permanent discounts on the purchase of the brand’s vehicles (or the option to acquire one’s company car).

• Massive uptake: The proposal attracted so much interest that tens of thousands of employees signed up, overwhelming the company’s internal portal and forcing an early closure of the registration process.