Bosch, one of Germany’s largest employers, is cutting working hours for 10,000 additional employees after large-scale layoffs

Robert Bosch, the struggling German industrial giant undertaking a major overhaul of its workforce, has doubled down on cost-saving efforts by cutting wages and working hours for thousands more employees, a sign of the plight facing German companies as the country’s economy stagnates. .

On Friday, Bosch said it would cut the working hours of 450 employees from 38 to 40 hours a week to 35 hours a week, effectively giving employees an undesirable four-day week. In an email to LuckThe company confirmed it would double its plans by extending reduced working hours to 10,000 of its workers.

The company explained that the mobility sector is undergoing a “profound transformation”, with global vehicle production stagnant and only a marginal recovery expected next year at best. He added that demand for automated driving solutions is not developing as previously predicted.

“We must adapt our structures to the changing market environment and reduce costs in the long term to strengthen our competitiveness and make the division fit for the future,” said Stefan Hölzl, executive vice president responsible for finance and administration in the cross-domain division. Computing Solutions Department.

Many of those who didn’t see a reduction in hours faced even worse news that they would lose their jobs. On Friday, Bosch also said it would lay off 5,550 of its workers due to the company’s difficult financial situation.

It followed an announcement in October that Bosch would lay off 7,000 employees as company chairman Stefan Hartung said the company would miss its 2024 financial targets.

Bosch fights economic downturn in Germany

According to Bosch’s latest annual report, Bosch is one of Germany’s largest employers, with 429,000 employees at the end of 2023. This figure is likely to be significantly lower by the end of 2024 after two rounds of layoffs.

Speaking on Friday, a Bosch spokesman said the decisions to cut working hours were taken in the context of a “difficult economic situation”. The German economy faces a second straight year of negative growth as the manufacturing sector is mired in a two-and-a-half year recession.

The €92 billion giant Bosch, which makes most of its revenue from its car supply business, has been unable to escape the downturn in Europe’s auto sector, which has hit German automakers particularly hard.

The company makes products such as brakes and spark plugs for several automobile manufacturers, which proved a boon as globalization expanded at the turn of the century.

However, European automakers are struggling to adapt to growing competition from low-cost Chinese suppliers and falling demand abroad, and are also concerned about potential tariffs under the new Donald Trump administration in the United States.

The problems of German companies highlight the country’s problems as an export-oriented economy that has failed to adapt to rising energy prices and declining demand in vital foreign markets.

Volkswagen is in the midst of a huge 10 billion euro cost-cutting campaign that is being held back by a fight with its powerful works council over agreements to cut wages, layoffs and potential plant closures.

Volkswagen chief executive Thomas Schaefer told German weekly Welt am Sonntag that avoiding layoffs and plant closures would not help the automaker keep pace with its competitors.

“Ultimately, any solution must reduce both excess capacity and costs. We can’t just put a Band-Aid on it and keep pushing it forward. It could really impact us later,” Schaefer said.

This story was originally published on Fortune.com.