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BMW, the world's largest premium carmaker, will cut more than 8,000 jobs as it attempts to make radical savings.

The German carmaker also held up the threat of more job cuts in the future if the euro continued to strengthen above $1.50.

The majority of the job losses will come in Germany, in what is a shock at the company that has been an enduring success story. About 2,500 permanent jobs and 5,000 temporary positions will go there.

BMW wants to cut a further 600 permanent jobs overseas as it tries to make annual cost savings of €500 milion (£381 million) immediately and €6 billion by 2012. In December BMW said that it would need to restructure to turn around its profitability. BMW has a total workforce of 80,000.

The IG Metall union called the announcement unnecessary. Werner Neugebauer, the union's chief in Bavaria and a member of BMW's supervisory board, said that Ernst Baumann, the carmaker's head of personnel, “appears to think he has to play the agitator in order to be able to push up the share price by leaving the work force in a state of permanent insecurity”.

Of BMW's 28,000 overseas employees, the 600 job cuts are likely to fall at its sales subsidiaries. Mini, BMW's successful operation at Oxford, and its Hams Hall engine plant near Birmingham are not thought likely to be affected.

BMW has increased its use of temporary workers in order to scale its workforce up and down. The company will increase flexible working across its operations, including partial retirement, so that it can boost employment in busy periods and scale it back when production needs subside. The group said that it needed to boost its productivity per worker.

BMW has been hit by the weakness of the dollar in its exports, although it has a factory in South Carolina making SUVs and its Z4 Roadster. BMW unveils its annual profits on March 18. Last year pre-tax profit excluding exceptional items increased 3 per cent to €4.12 billion.