Robert Bosch, the struggling German industrial giant that is overhauling its workforce, has doubled its cost-saving efforts by cutting wages and hours for thousands of additional employees, a sign of the plight facing German companies amid the country’s faltering economy. .
Bosch said Friday it will cut work hours for 450 employees from 38-40 hours per week to 35 hours per week, effectively giving employees an unwanted four-day week. The company confirmed on Saturday that it would double those plans, extending reduced hours to 10,000 of its workers, according to Several reports.
Many of those who did not see their hours reduced faced worse news that they would lose their jobs. Bosch also said on Friday that it would lay off 5,550 of its workers to confront the company’s difficult financial environment.
This followed an announcement in October that Bosch would lay off 7,000 employees as company president Stefan Hartung said the company would not meet its 2024 financial targets.
A Bosch representative did not immediately respond to a request for comment.
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Bosch is one of Germany’s largest employers, with 429,000 employees at the end of 2023, according to its latest annual report. This number is likely to be much lower by the end of 2024 following two rounds of layoffs.
Speaking on Friday, a Bosch spokesman said the decisions to reduce working hours were taken in the context of the “difficult economic situation”. The German economy is poised for a second straight year of negative economic growth, with the manufacturing sector mired in two-and-a-half years of recession.
€92 billion giant Bosch, which generates most of its revenue from its auto supply business, has been unable to escape a downturn in Europe’s auto sector that has hit German automakers particularly hard.
The company makes things like brakes and spark plugs for several automakers, which proved to be a boon as globalization expanded at the turn of the century.
However, European carmakers are struggling to adapt to increasing competition from cheap Chinese suppliers and falling demand abroad, while also worrying about potential tariffs under the incoming Donald Trump administration in the US.
The struggles of German companies point to the problems the country faces as a heavily export-reliant economy that has been unable to adapt to rising energy prices and weak demand in its vital foreign markets.
Volkswagen is in the midst of a massive €10 billion cost-cutting drive, which has been held up by a battle with the powerful works council over agreements on wage cuts, layoffs and potential plant closures.
He speaks to the German weekly Bulletin The world on SundayThomas Schäfer, Volkswagen’s brand chief executive, said avoiding layoffs and plant closures would not help the automaker keep up with its rivals.
“Ultimately, any solution has to reduce excess capacity and costs. We can’t just stick a band-aid on it and keep pulling it out. That’s going to come back to bite us later in a serious way,” Schaefer said.
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