The impact of the epidemic is more than expected, BMW may have to lay off staff to "save itself".

SMM: according to reports, due to the outbreak of the new crown virus and the decline in car sales, BMW Group announced on June 19 that it would cut 6000 full-time jobs and massively cancel temporary workers and short-term contracts. The layoffs account for about 5 per cent of BMW's existing staff of about 126000. BMW has reached an agreement with employee representatives, the report said.

This is the first time that Germany's BMW has implemented layoffs since the 2008 financial crisis. Since last year, BMW has said it will not force German full-time workers to cut jobs in 2019 or 2020, although its profit margins have fallen short of expectations. Instead, it will cut costs by retiring early and reducing annual bonuses.

The epidemic changed BMW's non-layoff plan. Affected by the shutdown, BMW said it would lose money in the first half of 2020 and its full-year sales are expected to fall from 2.5 million to about 2 million. According to BMW's first-quarter results, it delivered 477100 new BMW, MINI and Rolls-Royce cars to the world in the first three months of 2020, down 20.6 percent from a year earlier.

The layoffs are not without warning, after the group has adjusted 34000 employees to short-time work, but is still struggling to cope with the impact of the new crown pneumonia epidemic. Figures show that German car production fell 44 per cent from January to May 2020 and is expected to fall by 27 per cent for the whole year, while the total number of layoffs in auto-related industries as a result of the epidemic is likely to reach 100000.

Indeed, in May, Oliver Chipze (Oliver Zipse), BMW's chief executive, warned that demand recovery in Europe and the US would be "very slow" in spite of the rebound in the Chinese economy. He told investors that China's recovery would have a limited impact on the recovery of other countries, adding that forecasts for 2020 "look bleak" and that 2021 remains "highly uncertain".

At the same time, at a time when the automobile industry is undergoing a century of reform, enterprises are strengthening the layout of electrification and intelligence, which also requires a large amount of investment. Therefore, BMW and other car companies in the current more need to "tighten food and clothing, practice internal skills", only "endure" this period of time, in order to better start again.

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