Thursday, July, 07, 2022 03:20:52

BMW, a German multinational company, is reportedly planning to lay off as many as 10,000 employees due to the rising impacts of the COVID-19 pandemic on its businesses.

Sources with knowledge of the matter have cited that the move is a part of its cost-cutting strategy and effort to reduce capacity. Sources further added that the company and the council of workers have signed an agreement on a satisfactory package for the laid off employees. This consists of various personnel measures to ensure a sustainable future.

Poor quarterly sales of the company’s luxury vehicles and motorcycles have been observed due to the ongoing coronavirus outbreak. There has been a rising need to develop various technologies such as efficient electric powertrains as well as autonomous capabilities.

The agreement signed between BMW and Daimler, Mercedes-Benz’s parent company, to jointly develop the driverless technology has also been adversely impacted by the pandemic. This collaboration was announced in 2019and could have led to the two rivals in Germany to partner while saving the overall development costs.

Sources further stated that the companies have shifted their focus to the existing growth opportunities due to the high impact of coronavirus on the carmakers. The cancellation of this agreement to develop driverless tech was reportedly amicable and mutual.

Additionally, the two carmakers have stressed the rising impact of the ongoing pandemic to the automotive industry and finalized on withdrawing the deal. This was concluded by considering the high expenses likely to be involved in developing this shared tech platform. Taking into consideration the current business and economic downturn of various companies across the globe, the believe that the timing is unsuitable for the implementation of the cooperation.

The ride-hailing, electric vehicle charging, and car-sharing joint venture between BMW and Mercedes is reportedly not impacted by the COVID-19 crisis.

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