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The global automotive supply chain is experiencing significant turmoil, with Bosch, the world's largest automotive supplier and technology company, facing severe challenges. The company has reported a substantial decline in profits and is bracing for potential job cuts due to weak market demand, particularly in Europe.
In 2024, Bosch's earnings before interest and taxes (EBIT) plummeted by one-third to EUR3.2 billion, reflecting the harsh realities of the current economic climate. CEO Stefan Hartung has indicated that 2025 is expected to be another challenging year, with no immediate recovery in sight.
Despite efforts to boost sales, Bosch's revenue fell by 1% last year, totaling EUR90.5 billion, which was below the company's targets. Hartung acknowledged the increasing competitive pressures from China, along with issues such as overcapacity and regulatory uncertainties impacting the automotive sector.
Furthermore, Bosch is grappling with a notable decrease in vehicle demand, especially for electric vehicles. Consumers are also hesitating to purchase household appliances such as power drills, washing machines, and refrigerators, which has further affected the company's performance.
Other divisions of Bosch, including machinery and building technology, are similarly struggling due to a weak economic backdrop. Many companies are postponing investments, and the European heating market is also posing challenges to the building technology sector. Hartung pointed out the unusual situation of lacking significant growth triggers across all sectors simultaneously.
Initially, Bosch aimed for a growth rate of 5% to 7% in revenue. However, significant delays in market development, particularly in promising sectors like e-mobility, heat pumps, and hydrogen technologies, have hindered progress. While Bosch is growing in these areas, it is not achieving the anticipated rates, and high investments in these future technologies are further straining profitability. Nevertheless, no divisions of Bosch reported losses, despite some experiencing notable declines in revenue.
The company's management is already strategizing for 2026, aiming to double its profits compared to 2024. Achieving this goal will require substantial financial input, and while Hartung acknowledges the challenges, he believes it is attainable and worth pursuing.
In response to the ongoing economic difficulties and necessary investments, Bosch plans to implement cost-saving measures, which will include workforce reductions. The company has already announced plans to cut more than 12,000 jobs globally, following a 3% reduction in its workforce to approximately 418,000 employees in 2024. In Germany alone, over 6,000 positions are at risk, including in key future-oriented sectors like e-mobility and software development. The employee council has warned that further cuts could be forthcoming.
Despite these challenges, Bosch remains optimistic about improving both revenue and earnings in 2025. A detailed forecast is expected in May, alongside the release of the complete and audited annual financial results.
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