Bosch India Likely To Cut 2000 Jobs As Auto Sales Dip, Profit Slumps 66%
Bosch Ltd, one of the world’s largest auto-parts supplier, has also cut jobs following its parent company, Robert Bosch GmbH as auto sales declined to the lowest in decades.
The German giant will reduce workforce cutting “a couple of thousand” jobs in India in the next four years, India Managing Director Soumitra Bhattacharya said in an interview in Bangalore on December 30. About 10% of the total 3,700 white-collar jobs and a comparatively higher percentage of 6,300 blue-collar jobs will be cut, he added.
“There is a transformation happening across the industry,” Bhattacharya said. “We looked at that as an opportunity to transform the company even before the downturn started.”
The auto industry across the world will cut 80,000 jobs as demand contracts. This is expected to affect sales of the auto part makers.
However, the German company sees the demand for internal combustion engine vehicles growing in the Indian auto industry. Both ICE and electric powertrains will coexist for a long time, Bhattacharya said. In India, Bosch expects a revival in auto sales in the coming two-three years.
“India’s auto sector is going through cyclical and structural changes because of electrification, technological shift and the advent of shared mobility,” Bhattacharya said. He claims that nearly 80 per cent of vehicles will run on ICE by 2030 in India.
Bosch India’s profit slipped by 66 per cent in the quarter ended September 30, from a year earlier, with its share prices dipping 22 per cent last year.
Effect On Country’s GDP
Bosch’s decision comes months after the Indian automotive sector witnessed a steep decline in vehicle sales for over 12 consecutive months in 2019, the biggest drop in two decades.
India’s $57 billion automotive component industry, which constitutes 2.3 per cent of the country’s GDP and provides job to over five million people, witnessed its worst-ever phase in 2019.
Passenger vehicle sales declined by 17.98 per cent in April-November 2019 over the same period last year, according to the Society of Indian Automobile Manufacturers (SIAM).
India’s GDP for the September quarter fell to a six-year low of 4.5 per cent, largely affected due to dip in manufacturing output.