When presenting its annual results for 2025, Bosch announced that it would not reach its target profit margin of seven percent until 2027 at the earliest due to weak demand and high costs. The maker of power components and power tools said early signs of a global economic slowdown this year would add to the impact of tariffs, adding to price pressures. Namely, in recent years, Bosch has repeatedly postponed the realization of its ambitions related to the profit margin.
“The goal is still set in stone, only that stone has a habit of moving,” described the situation, the CEO of Bosch, Stefan Hartungsuggesting they could accelerate workforce reductions beyond the 13,000 layoffs announced last year.
The company added in an official statement that ensuring long-term competitiveness and capacity for investment means that “they have to do much more to reduce staff costs and optimize the organization”.
Work force reductions in response to pressures
Competition from Chinese rivals and software-focused companies is intensifying, putting pressure on traditional automotive suppliers. At the same time, car manufacturers are developing more and more technologies within their own plants, which reduces the bargaining power of suppliers.
The German auto sector has responded with a wave of layoffs, with Bosch leading the cuts with plans to cut a total of 18,500 jobs. That includes the 13,000 redundancies announced in September at its mobility unit, although operational redundancies at sites in Germany have been ruled out until the end of 2027.
Last year’s return on earnings before interest and taxes fell to around two percent from 3.5 percent in 2024, which is below expectations. Revenues rose a modest 0.8 percent to 91 billion euros, with growth slowed by a decline in Europe, their biggest market. Currency effects caused by a weak dollar and tariffs further weighed on results, while increased competition, weak demand from automakers and restructuring costs continued to pressure the business.
“It’s a tough fight to achieve the most socially acceptable approach possible. We hope we won’t have to do anything of that magnitude in the coming years,” Hartung said.