Bosch under pressure: 2.5 billion euros in savings and job cuts are threatened!

Bosch under pressure: 2.5 billion euros in savings and job cuts are threatened!

The technology group Bosch is under considerable cost pressure and has announced that it wants to save 2.5 billion euros per year worldwide. Labor director Stefan Grosch explained in an interview with the “Stuttgarter Zeitung” that decisions on the specific savings measures should be made this year. Opportunities to guarantee employment for employees in the Bosch Mobility area are available if the employees support the savings plans. There is currently an exclusion of operational dismissals in the automotive division until the end of 2027, but the unclear situation is causing concern for many employees.

The introduction of the savings plans comes in a context in which Bosch is in crisis. Earnings before interest and taxes (EBIT) fell by a third to 3.2 billion euros last year, while sales fell slightly to 90.5 billion euros. These challenges go hand in hand with overcapacity, decreasing competitive pressure and regulatory uncertainty. Grosch says: "The structural change has changed the calculation; electromobility only requires a tenth of the workforce compared to diesel drives."

Austerity measures and takeovers

Despite the planned cost-cutting measures, Bosch has announced the largest takeover in its company history. The heating, ventilation and air conditioning business of Johnson Controls and Hitachi will be taken over for 7.4 billion euros, which will increase the number of employees in this sector from 14,600 to over 26,000. The group plans to invest in German locations in order to consolidate its market position in the air conditioning market. CEO Stefan Hartung described the takeover as an important milestone in Strategy 2030. The acquisition is expected to be completed in around twelve months.

Management also sees the takeover as an opportunity to sustainably strengthen the business area, although there are always risks with billion-dollar takeovers, as the example of ZF Friedrichshafen shows, which is struggling with high debts. The employee representatives criticize the savings announcements as “salami tactics” and demand clear and timely planning from management.

Impact on the workforce

Personnel development at Bosch is tense. Over 12,000 jobs have already been announced to be cut since mid-2023, with 6,000 jobs in Germany being affected. Job cuts in the automotive sector, which is under pressure, are being considered as a savings measure. Bosch justifies these measures with weak demand for electric cars. Nevertheless, Bosch is optimistic that the acquisition and investments in future areas such as e-mobility, heat pumps and hydrogen can increase sales and profits by 2025.

Grosch emphasizes the need to regularly review the need for adjustments in order to survive in competition. The workforce, which will have been reduced by three percent to 418,000 employees in 2024, will continue to be monitored politically critically by the works council and IG Metall. The pressure to make investments in future areas due to unfulfilled growth targets also remains high. Bosch must achieve a return of seven percent to remain competitive.

The situation remains complex and it remains to be seen how the company's plans will develop and what specific measures will ultimately be taken to successfully meet the challenges.

For more information: SWR, bw24, daily news.