1200 layoffs, global automotive electronics giant

Source: Shenzhen Technology

    Recently, the globally renowned automotive supplier Bosch announced plans to lay off approximately 1200 employees in its software and electronics departments by the end of 2026. This decision involves Bosch‘s "cross domain computing solutions" department, which has about 20000 employees and focuses on the research and development of autonomous vehicle technology. According to Bosch, the layoffs will mainly involve development, sales, and management positions.

    The main reasons for layoffs include slower than expected development progress of fully automated driving technology, as well as the combined impact of external factors such as rising global energy and commodity prices, high inflation, and economic weakness. Although Bosch showcased its first new cross domain computing platform at the recent CES 2024 exhibition, integrating information entertainment and driving assistance functions into a single chip system, it is clear that the company is facing unprecedented challenges.

    A Bosch spokesperson stated that negotiations with employee representatives have not yet begun, and the layoff plan has not yet been finalized. However, the continuous rise in energy costs and the intensification of budget crises in Germany have had a significant impact on businesses. Previously, Bosch had warned that the challenges faced by the company were much greater than expected.

    It is worth mentioning that in December last year, Bosch also announced another layoff plan, planning to lay off at least 1500 employees in two factories in Germany by the end of 2025 to adapt to the constantly changing demands and technological developments in the automotive industry. At that time, Bosch attributed the layoffs to high upfront expenses, declining employment demand in the electric vehicle sector, and global economic weakness.

    Although the specific business data of Bosch‘s automotive division for 2023 has not been released, according to its 2022 financial report, the automotive business sales reached 52.6 billion euros (approximately RMB 408.7 billion), a year-on-year increase of 16%. However, the profit margin of this business is the lowest among all businesses, only 3.4%. However, Bosch has made adjustments to its automotive business in 2023, hoping to achieve new growth.

    As German car manufacturers face a challenging year of 2024, slowing demand and rising consumer financing costs have brought pressure to the entire industry to reduce production and prices. These pressures not only affect the car manufacturers themselves, but also affect component suppliers such as Bosch, Continental, and ZF. These companies are also working hard to address the complex and expensive issues brought about by the transition to electric vehicles.

    According to reports, ZF is considering closing two German factories, cutting 12000 positions, and relocating some functional departments to lower cost countries. Continental Group is also considering selling assets and laying off thousands of employees to enhance the competitiveness of its automotive business. In addition, due to weak market demand, automaker Stellantis is also planning to lay off approximately 2250 workers at the Mirafiori factory in Italy. This layoff plan will be implemented from February 12th to March 3rd, affecting 1250 workers producing electric Fiat 500 and another 1000 workers producing Maserati models.