According to Bloomberg, German automotive components supplier Bosch (Robert Bosch GmbH) is planning to cut 1,200 jobs in its software and electronics divisions over the next three years to address rising costs and a slowdown in growth.
Bosch announced on January 18 that, due to increased expenditures on energy and raw materials resulting from a soft economy and high inflation, the company will consider intensifying cost-saving efforts in its cross-domain computing solutions division, responsible for developing autonomous driving technology.
In a statement, Bosch mentioned that this business unit is facing "greater challenges than expected." Currently, the company has initiated negotiations with employee representatives regarding the planned layoffs to be realized by the end of 2026, including a potential reduction of up to 950 jobs in Germany.
German automakers are preparing for a challenging 2024, with slowing demand and increased consumer financing costs adding pressure to cut production and lower car prices. Any production cuts will impact component suppliers such as Bosch, Continental AG, and ZF Friedrichshafen, as they grapple with the complex and costly challenges of transitioning to electric vehicles.
Bosch stated that the final number of job cuts has not been determined yet and denied the possibility of mandatory layoffs in its Bosch Mobility Solutions division in Germany by the end of 2027. Additionally, the company mentioned that it is developing plans to cut at least 1,500 jobs in two German factories this year.
ZF Friedrichshafen's union spokesperson also indicated that the company is considering closing two German plants, cutting 12,000 positions, and relocating some functional departments to lower-cost countries. Moreover, Continental is exploring asset sales and considering laying off thousands to enhance competitiveness in its automotive division.
As Germany faces rising energy costs and a federal budget crisis, there is increasing skepticism about Germany's competitiveness as an established industrial base.
