BMW Cuts 20% of Staff to Fund New Flagship SUV and Entry-Level EV

BMW is restructuring its product strategy to prioritize high-margin vehicles, focusing on a larger flagship SUV for the U. S. market and an entry-level electric vehicle for Europe. To fund the development of these new models and reduce costs, the manufacturer is cutting 20% of its management and other staff, while discontinuing lower-profit models such as the 2 Series Active Tourer.

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BMW

The company's approach is divided by region. At its Spartanburg plant in the United States, production is currently at capacity due to strong demand for premium SUVs. In response, BMW has confirmed it is developing a new flagship all-terrain vehicle that will be larger than the current X7, designed specifically to meet the American preference for maximum size and space.

Europe will receive a different priority: a compact electric car built on the Neue Klasse architecture. This model is intended to be the most affordable in BMW's electric lineup. A key technical shift for owners will be the return of rear-wheel drive to compact models, a feature enabled by the new Neue Klasse platform.

Upcoming releases include a new Alpina luxury sedan based on the 7 Series, scheduled for 2027. A compact electric vehicle, which will serve as a successor or electric alternative to the 1 Series, is expected in 2028.

These product changes are accompanied by significant workforce reductions. BMW confirmed that 20% of its management and other employees will be let go, and the number of internal divisions will be reduced. Models with low demand and profitability are being phased out without successors, with the 2 Series Active Tourer identified as the first confirmed casualty of this optimization.

Despite the layoffs, BMW is increasing investment in technology to lower design costs. The company is implementing artificial intelligence tools in its engineering processes. In terms of patent activity for 2026, BMW ranks second among global automakers, trailing only Toyota in the number of innovation registrations. This activity is largely driven by the refinement of the Neue Klasse platform, which will serve as the foundation for most of the brand's future models.