Job Reductions Due to Overcapacity and Slow EV Transition
Bosch, the global auto technology supplier, revealed plans to eliminate up to 5,500 positions in its automotive division over the next few years. This move comes as the company grapples with stagnating global car sales, an oversupply of factory capacity, and the slower-than-expected shift to electric vehicles (EVs) and software-controlled cars. Bosch cited these factors as key drivers for the cuts, reflecting broader struggles within both the German and global automotive sectors.
Impact on Bosch’s Workforce and Facilities
The cuts will primarily target the part of Bosch’s workforce involved in advanced driver assistance, automated driving technologies, and vehicle software development. Of the total 5,500 job cuts, 3,500 are expected to take place by the end of 2027, with roughly half of those reductions occurring in Germany. In addition to workforce reductions, Bosch will also close or downsize several plants, including facilities in Hildesheim (750 jobs) and Schwaebisch Gmund (1,300 jobs), with a projected timeline extending into the late 2020s. Bosch stressed that these cuts reflect both a broader issue of overcapacity in the auto sector and a slowdown in the development of future vehicle technologies.
Social Responsibility in Job Cuts and Continued Investment in Mobility
Despite these planned job losses, Bosch has committed to carrying out the reductions in a socially responsible manner, in accordance with agreements with employee representatives. A “jobs pact” in place guarantees no layoffs at Bosch’s German facilities until 2027, with some exceptions. While the company adjusts to the challenges facing the automotive sector, Bosch remains committed to its mobility division, which employs 230,000 people globally. Bosch continues to produce key components for the transition to electric vehicles, including components for driver assistance systems, automated driving, and vehicle software solutions.
Decline in Auto Market and Project Delays
Bosch’s decision also reflects a larger trend in the automotive industry, where sales have been sluggish, and automakers are delaying or canceling many EV-related projects. The company noted that the market for future technologies, such as electric and software-defined vehicles, has not grown as quickly as expected, leading to reduced demand for certain components. Bosch’s strategy moving forward will likely involve focusing on its core competencies while adapting to the ongoing changes in the global automotive market.
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