Bosch, a renowned automotive supplier, is facing tough times ahead as it plans to cut more than 7,000 jobs at its German plants due to a lowered growth forecast for 2024. The company’s CEO, Stefan Hartung, expressed concerns about not meeting economic targets for the upcoming year, indicating that further staff adjustments may be necessary.
Despite reporting a revenue of nearly 92 billion euros in 2023, Bosch expects a maximum return on sales of four percent this year, down from the five percent achieved last year. Hartung has set a target of reaching seven percent by 2026, emphasizing the challenges posed by the industry-wide crisis, economic slowdown, and uncertainties surrounding the transition to electric vehicles.
To address weak demand and reduce costs, Bosch plans to implement job cuts through severance programs until 2027. This decision follows previous announcements of job cuts across various divisions globally, including the automotive supply, tools, and household appliances sectors in Germany.
In a significant move, Bosch revealed its intention to acquire Johnson Controls, an Irish company, for nearly 7.4 billion euros, marking its largest acquisition to date. The focus of this acquisition is on the heat pump and air-conditioning division, with plans to integrate Johnson Controls’ business into the Home Comfort Group within Bosch. The transaction is expected to be completed within 12 months.
The company’s ability to finance such acquisitions solely from its internal resources showcases its financial stability and strategic planning. Despite the challenges faced by Bosch in the current market environment, this acquisition signals a proactive approach to expanding its capabilities and offerings in key sectors.
As Bosch navigates through these changes and adaptations, stakeholders will be closely monitoring the company’s progress and strategic decisions in the coming months. The impact of these job cuts and acquisitions on Bosch’s overall performance and market position will undoubtedly be a focal point for industry analysts and observers.
For more updates on business news, corporate developments, and breaking news events, stay tuned to Live Mint and download The Mint News App for daily market updates and insights. Bosch’s journey ahead will be closely followed by the business community as it navigates through a challenging economic landscape while pursuing growth opportunities in key sectors.