German car supplying giant Robert Bosch has become the latest company in the country to feel the strain of Germany’s waning economy, announcing hundreds of its workers will cut their hours to the equivalent of a four-day week.
The €92 billion industrial conglomerate Bosch said 450 of its employees would reduce their hours and, accordingly, their pay starting next spring, a company spokesperson told Coins2Day. Employees affected will drop their hours from between 38 and 40 hours a week to 35 hours starting March 1.
The spokesperson cited a “difficult economic situation” for its decision to reduce the hours worked by some employees, primarily at its Stuttgart and Gerlingen locations.
Bosch has been caught in the maelstrom faced by European carmakers as they crumble from falling demand in Europe and overseas in addition to unprecedented pressure from Chinese competitors.
Bosch is Europe’s 24th largest firm by revenue, operating in consumer products, mobility, and industrial technology. However, it makes over half its revenues from its automotive supply business, producing things like brakes and spark plugs.
In October, the group said it planned to lay off 7,000 employees as its chairman Stefan Hartung announced the company wouldn’t meet its financial targets for 2024. Hartung refused to rule out further personnel reductions at the troubled supplier.
Fellow German automotive giant Volkswagen is in a long battle with its powerful works council to reduce its administrative costs amid a wider €10 billion cost-cutting drive.
The carmaker has proposed a 10% pay cut for staff and hasn’t ruled out the potential for its first-ever Germany plant closure. Profits at Volkswagen fell to a three-year low in the first half of 2024.
Other European automotive companies have experimented with reducing the working hours of their employees to keep the lights on. In February, Stellantis-owned Fiat cut employees’ working hours at its Turin plant from a double-shift to a single-shift pattern, while it furloughed other workers.
The grisly economic context in Germany gives an indication of the challenges faced by its biggest firms.
The country expects a second consecutive year of negative economic growth, as its manufacturing sector languishes in more than two years of recession. The country has faced an omnicrisis of high energy prices following Russia’s invasion of Ukraine and falling external demand, which has hit its export-heavy economy.
