BMW’s Job-Cut Gambit: 7,700 Positions on the Line as Moody’s and UBS Turn Bearish
21.06.2026 - 16:26:09 | boerse-global.de
BMW is heading into crunch negotiations with labour representatives as potential redundancies for up to 7,700 employees emerge as the stark consequence of its third profit warning in as many months. The Munich-based premium carmaker, whose shares have lost roughly 37% of their value since the start of the year, is battling a toxic mix of China demand weakness, surging logistics costs tied to the Middle East conflict, and a rapid shift toward local EV competitors in its most important growth market.
The depth of the operational crisis was underscored on June 19 when Moody’s revised its credit outlook for BMW to “negative” while affirming the long-term “A2” rating. The agency explicitly cited the company’s revised earnings and cash flow forecasts, noting that profitability was expected to improve but instead deteriorated. That assessment followed a June 16 profit warning in which BMW slashed its automotive segment margin guidance to a range of just 1% to 3% — a drastic cut from earlier targets. UBS analyst Patrick Hummel responded two days earlier, on June 17, by slashing his price target from €88 to €70, keeping a “Neutral” rating and warning that the scale of the guidance reduction exceeded market expectations. RBC Capital Markets joined the downgrade chorus, lowering its target to €84 while maintaining “Sector Perform”.
China stands at the centre of BMW’s troubles. The country has long been the group’s biggest single profit driver, but local manufacturers are now flooding the market with cheaper electric vehicles, eating into BMW’s premium share. In a strategic pivot, BMW plans to phase out locally produced EVs in China, partly to avoid the risk of new EU tariffs on vehicles manufactured inside the country. At the same time, the company is pressing ahead with a multi-week retooling of its Leipzig plant scheduled for summer 2026, investing a three-digit million euro sum to integrate production of the fully electric “Neue Klasse” models.
Should investors sell immediately? Or is it worth buying BMW?
The stock market has already priced in a bleak outlook. BMW shares closed last Friday at just above €60, dangerously close to the 52-week low of €58.80 hit earlier that week. Technical indicators paint a deeply oversold picture: the 14-day relative strength index stands at 20.5, while the share price trades 20.23% below its 50-day moving average and roughly 28% under the 200-day line. A sustained break below the €58.80 support level could invite another wave of selling, with the next clear floor still undefined.
BMW is not alone in its pain. The entire German automotive sector is undergoing a painful transformation, with Volkswagen recently defending plans to cut as many as 50,000 positions by 2030. For BMW, the next major catalyst will be its capital markets day in September, when management is expected to deliver detailed explanations for the strategic overhaul and the job reductions now on the table.
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