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On October 21, the topic “BMW employees rush to resign, overwhelming the system” dominated the trending list. What prompted tens of thousands of employees to swarm the internal HR portal was a voluntary resignation compensation package that “far surpasses industry norms” — some employees stand to receive compensation of up to €650,000, roughly equivalent to RMB 4.876 million at the current exchange rate. This century-old automaker, celebrated for its handling and mechanical excellence, found its own systems brought to a standstill by the sheer magnitude of its compensation offer.

How the €4.87 Million ‘Cap’ Was Determined

The pivotal figure in this compensation scheme originates from a report by Germany's Handelsblatt. BMW intends to reduce its white-collar workforce by 8,000 positions by the end of 2027 and has communicated compensation plans to tens of thousands of eligible employees. The maximum compensation of €650,000 is not universally accessible; it is earmarked for long-serving senior employees at BMW. According to internal sources, certain senior employees are eligible for approximately €50,000 in compensation for each year of service. By this metric, an employee with 12 years at BMW could potentially receive around €600,000, roughly equivalent to RMB 4.493 million.

A comparative analysis underscores the generosity of this offer. Two years prior, Volkswagen provided some employees with a maximum resignation compensation of approximately €405,000, roughly equivalent to RMB 3.038 million, excluding early resignation incentives. Mercedes-Benz offered a maximum compensation of around €500,000, roughly equivalent to RMB 3.751 million. BMW's €650,000 surpasses Mercedes-Benz by €150,000 and Volkswagen by nearly €250,000.

The payment modalities are also tailored for flexibility. Employees have the option to opt for a lump-sum payment, installments, or transfer a portion of the amount into the company's pension plan or direct insurance, with combinations of these options also permissible. For employees aged 55 and above, BMW extends certain additional benefits akin to those of retirees, including employee discounts on new and used car purchases. In essence, those departing receive not just a cash payout but also a transitional voucher to retirement benefits.

During the System Outage, 40,000 Employees Sought to Ascertain Their Compensation

What transformed this compensation plan into a public spectacle was the system outage on October 8. On that day, BMW launched a personalized compensation query channel on its internal HR portal for approximately 40,000 eligible employees in Germany. Upon logging in, employees could view the precise amount they would receive if they opted to resign. Consequently, around 40,000 employees accessed the system simultaneously, overwhelming the portal within hours and precipitating system failures. BMW rectified the system the following day, but applications continued to stream in, compelling the company to temporarily suspend new applications and prioritize processing those already submitted.

What Do 40,000 Employees Signify? BMW employs approximately 85,000 full-time staff in Germany, with around 40,000 administrative and R&D personnel eligible to apply, excluding production line workers. In other words, nearly all eligible employees went online to ascertain their “exit price.” BMW had to apply the brakes amid the surge in resignation intentions, a detail that itself stands as a direct testament to the compensation plan's allure.

This layoff plan was not a hasty decision. On July 29, 2026, BMW announced an agreement with labor unions to reduce approximately 8,000 positions through voluntary resignations by the end of 2027, with over half of the reductions slated for Germany. The plan adheres to a “dual voluntary” principle, necessitating agreement from both employees and the company to finalize resignations. It officially commenced in October 2026 and will persist until the end of 2027. The 8,000 positions earmarked for reduction are concentrated in non-production departments such as administration and R&D, excluding vehicle assembly lines and core manufacturing roles. BMW anticipates annual savings of around €1 billion (approximately RMB 7.501 billion) from 2028 onwards following the completion of the reductions. While billions in upfront compensation will be disbursed, the company perceives this “buyout fee” as a shortcut to curtailing fixed costs compared to the long-term burden of salaries, social security, and office expenses.

The Generous Payouts Mirror Pressing Financial Realities

BMW's readiness to disburse billions in one fell swoop stems from sustained operational pressures. In the first quarter of 2026, BMW Group's revenue stood at €31.007 billion, down 8.1% year-on-year; pre-tax profit was €2.348 billion, down 24.6%; and the automotive business's EBIT margin was a mere 5%. By the second quarter, the automotive margin had further dwindled to 2.3%. In the first half of 2026, net profit plummeted by more than a quarter. In June 2026, BMW management revised the full-year automotive EBIT margin guidance downward from 4%-6% to 1%-3%, marking the third consecutive year of downward revisions.

The single largest impediment is the Chinese market. BMW's third-quarter sales in China declined nearly 25% year-on-year, with growth in Europe and the U.S. insufficient to offset the shortfall. Over a longer timeline, sales in China fell 13.4% in 2024, another 12.5% in 2025, and continued to decline by over 10% in the first quarter of 2026. China's share of BMW's global sales has receded from a peak of around 33.5% to 25.5%. Once the largest single market contributing about a third of group sales and serving as a long-term profit engine, China has now become the heaviest drag on financial results under the dual pressures of electrification and price wars.

Concurrently, personnel changes transpired. In June 2026, BMW Group's former chairman Oliver Zipse stepped down after issuing a profit warning. Gao Xiang, the former CEO of BMW China, also officially departed, with Casimir Krieger assuming the role of the new BMW China CEO. New Group CEO Milan Nedeljković addressed layoff queries during the second-quarter earnings call, stating that BMW had reached a personnel restructuring agreement with labor unions and introduced a voluntary resignation plan with corresponding compensation. The rationale behind the compensation design is less about “generosity” and more a financial maneuver to substitute forced layoffs with voluntary negotiations and long-term fixed costs with one-time expenditures under Germany's stringent labor laws.

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