Bosch Plans Major Cost-Cutting Strategy Amid Industry Challenges

In response to ongoing challenges in the automotive sector, Bosch, a leading automotive supplier, has announced an ambitious plan to save billions of euros by 2030. The company aims to reduce costs in its automotive division by EUR2.5 billion annually, as revealed by Markus Heyn, head of Mobility Solutions, and Stefan Grosch, Director of Human Resources, in a recent interview with local media.

Based in Gerlingen near Stuttgart, Bosch has been actively working on cost management strategies for some time. However, the specific savings target had not been disclosed until now. The company has indicated that personnel reductions are likely, and further job cuts appear inevitable as part of this initiative.

Heyn emphasized the need for continuous adaptation to maintain competitiveness in a rapidly changing industry. He noted that while initial steps have been taken towards reducing costs, more actions are necessary. Grosch highlighted that the cost gap would need to be significantly narrowed in the coming years, with a goal of achieving a balanced budget by 2030. Decisions regarding this strategy are expected to be made within the year, in consultation with employee representatives.

Since late 2023, Bosch has already implemented several job reduction programs, particularly within its supply chain operations, resulting in thousands of job losses worldwide, including in Germany. The exact number of additional positions at risk remains unspecified, but the company has committed to adhering to an agreement that prevents layoffs in Germany's automotive segment until the end of 2027. Reductions will also target material and energy costs, with a focus on enhancing productivity.

Frank Sell, the chair of the company's works council for the automotive division, acknowledged the serious nature of the situation but pointed out that significant cost-cutting measures had already been undertaken. He called for the management to provide clear and concrete plans for the future of the division in Germany, urging a collaborative approach with employee representatives to find solutions.

Despite the struggles brought on by the automotive crisis, Bosch recently expressed optimism about growth in its mobility division. During the International Motor Show (IAA), the company projected a modest revenue increase of less than two percent for the current year, anticipating growth even amid a stagnating global vehicle production environment and challenges in electric mobility and autonomous driving. Bosch continues to supply manufacturers with a range of products, including powertrains, safety systems, steering and braking systems, sensors, high-performance computing units, and software solutions.