Bosch’s Layoffs: The Impact of Global Economic Challenges on the German Giant

German technology conglomerate Bosch is facing a wave of layoffs as it struggles to adapt to an uncertain global economy, intensified competition from China, and the transition to electric vehicles. According to CEO Stefan Hartung, the company can no longer afford to maintain inefficient jobs, making workforce reductions an unavoidable step.

Declining Financial Performance and Market Challenges

Bosch’s financial performance has been under pressure for some time. In 2024, the company’s operating profit (EBIT) fell to €3.2 billion, marking a 33% decline compared to 2023. Revenue also dropped by 1% to €90.5 billion. While company executives expected a stronger 2024, they now see 2025 as a transitional period, during which new opportunities for growth may emerge.

The primary reasons for these layoffs go beyond Germany’s economic slowdown. Bosch is under pressure to quickly adapt to technological shifts, particularly the decline of internal combustion engines (ICEs) and the increasing dominance of electric drivetrains and battery production. Investing in electrification is now critical, forcing the company to restructure its workforce accordingly.

Ongoing Job Cuts and Future Workforce Reduction

Bosch’s layoffs are not new. Over the past year alone, the company has already cut 11,500 jobs, including 4,400 positions in Germany. If current trends persist, Bosch could lose another 12,000 employees by 2032. To soften the impact, the company is encouraging early retirement options rather than enforcing widespread layoffs.

Despite these challenges, CEO Hartung sees a silver lining. Since the electric vehicle (EV) market is not expanding as quickly as anticipated, Bosch still has time to capitalize on its existing ICE production facilities. This transition period allows the company to strategically balance cost-cutting measures while maintaining market share in traditional automotive sectors.

Competition from China and Bosch’s Strategic Dilemma

Bosch’s biggest concern is growing competition from Chinese manufacturers, particularly BYD and CATL, which are rapidly gaining market dominance in EV and battery production. Chinese automakers are not only expanding their global footprint but are also making technological advancements at a pace that European firms are struggling to match.

To remain competitive, Bosch must:

• Accelerate investments in battery technology and electrification.
• Optimize its cost structure without compromising innovation.
• Leverage its ICE production as long as possible to maintain financial stability.

What’s Next for Bosch?

The next few years will determine whether Bosch can successfully navigate this transitional phase. The company hopes that 2025 will be a turning point, potentially leading to a more sustainable growth strategy. However, without significant advances in EV and battery technology, Bosch risks falling further behind its competitors in a rapidly evolving automotive landscape.