BERLIN, Germany: BMW and employee representatives are preparing for discussions on the company's plans after the German automaker issued a profit warning and announced measures to accelerate efficiency improvements.

The talks come as BMW grapples with weakening demand in China and higher costs linked to the war in Iran, pressures that have contributed to the company's third profit warning in as many years.

Analysts who participated in a call with BMW management following the warning said the company could increase efforts to localize production in North America and China and may also reduce jobs in Europe as part of broader cost-cutting measures.

"We are initially working on viable solutions through dialogue and with a sense of responsibility toward our employees," a spokesperson for BMW's general works council said in an emailed response to Reuters.

The spokesperson did not provide further details about the discussions.

Unlike German rivals Mercedes-Benz and Volkswagen, BMW has not announced large-scale redundancy programs in recent years. However, the company's workforce declined slightly in 2025, and that trend is expected to continue this year.

Investor concerns intensified after BMW's latest warning, which sent its shares to a near six-year low. New Chief Executive Milan Nedeljkovic said the company would step up structural cost-cutting measures and warned of a one-off impact from those efforts during the second half of 2026.

BMW currently expects to reduce its global workforce by as much as five percent by the end of 2026. Based on its workforce of just under 155,000 employees, that would amount to as many as 7,700 positions.

A company spokesperson said any reduction in headcount would continue to be achieved through natural attrition rather than layoffs.