(Bloomberg) -- Parts supplier Robert Bosch GmbH plans to cut 5,500 jobs globally, mainly in Germany, as the car industry’s woes ripple through the supply chain.
Bosch, the world’s biggest automotive supplier by revenue, will cut positions related to automated driving and car steering products in Germany, according to a statement from the IG Metall union. A Bosch spokeswoman confirmed the company aims to eliminate 5,500 positions globally, including 3,800 posts in Germany.
“The automotive industry is suffering from significant overcapacity,” Bosch said in a statement, adding the actual number of reductions will be determined in negotiations with labor representatives. “Competition and price pressure have continued to intensify.”
Privately-held Bosch is one of the biggest names in the automotive business with its components going into virtually all the 1.5 billion vehicles in operation across the world. Manufacturing everything from spark plugs to automated driving software, the company has invested heavily in new technologies, but is suffering with slumping demand for new cars.
European car production hasn’t recovered to its pre-pandemic peak of close to 16 million vehicles, and executives are now slimming down their operations to prepare for permanently lower demand. Bosch said global car production could decline this year and recover only modestly in 2025.
The company’s planned cutbacks are the latest sign of the pain rippling through the automotive parts industry, a sector that employs around 1.7 million workers across the European Union. Companies including Continental AG and ZF Friedrichshafen AG, as well as a raft of smaller companies, are dialing back employment in response to a slowdown in demand.
Automotive assemblers are also downsizing. Ford Motor Co. on Wednesday announced plans to shed another 4,000 jobs in Europe, about 14% of its local workforce. Volkswagen AG is considering measures including unprecedented plant closures in Germany. Mercedes-Benz Group AG is also planning cost cuts.
(Updates with additional detail on global car production.)
©2024 Bloomberg L.P.