Bosch Faces Challenges After Profit Decline: Insights for 2025

In the wake of a significant drop in profits, Bosch, the renowned technology corporation, is bracing for a challenging year ahead. Various factors have contributed to this downturn, with the recent introduction of U.S. tariffs adding further complications. The outlook is becoming increasingly uncertain, raising concerns about potential impacts on the workforce.

Stefan Hartung, the CEO of Bosch, highlighted the pervasive effects of U.S. trade policies during the company's financial presentation in Renningen, near Stuttgart. The exact financial repercussions of these tariffs remain unclear, with estimates ranging from millions to potentially billions. Hartung expressed skepticism about making accurate forecasts, suggesting that those attempting to predict the financial landscape require an exceptionally clear foresight.

Hartung anticipates that clarity regarding the situation may emerge later in the second half of the year, contingent upon forthcoming negotiations. However, he cautioned that the circumstances would differ significantly from previous conditions, likely leading to increased costs.

These uncertainties are reflected in Bosch's forecast, as the world's largest automotive supplier reported a modest revenue increase of approximately four percent in the first quarter compared to the previous year. Nevertheless, Hartung was cautious in his optimism, emphasizing that this growth should not be misconstrued as an indicator of a successful overall year. He characterized the upcoming year as exceptionally challenging in terms of predictions.

For 2025, Bosch is projecting a revenue growth of between one and three percent, which falls short of the company's medium-term targets. Financial chief Markus Forschner noted that there are expectations for an improved profit outcome. Furthermore, management is already focusing on plans for 2026, aiming for a return to significantly higher profit margins.

Hartung acknowledged that Bosch would need to continue refining its cost structures, which may unfortunately result in job reductions, particularly in Germany and Europe. The company has previously announced plans for workforce reductions, impacting thousands of jobs worldwide. As of the end of December 2024, Bosch's employee count had decreased to approximately 417,850, representing a decline of 2.7 percent or nearly 11,600 positions from the previous year.

The economic challenges experienced by Bosch have hit hard, with a reported adjusted profit before interest and taxes (EBIT) plummeting by more than one-third to EUR3.1 billion. The net profit saw a staggering decline of 49.5 percent, totaling EUR1.3 billion. In contrast, the company had initially set growth targets of five to seven percent for both revenue and profit.

Several factors have contributed to this downturn, including a sluggish demand for vehicles, especially electric ones. Additionally, consumer hesitancy regarding purchases of household appliances, such as power tools, washing machines, and refrigerators, has compounded the issue. Other sectors within the company, such as machinery and building technology, have also faced significant headwinds due to a weakening economic climate.