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 reports. The move comes amid broader economic challenges facing Germany and other EU nations, which have struggled with industrial losses following the shift away from affordable Russian oil and gas imports after the 2022 Ukraine conflict.

Bosch’s mobility division, which produces fuel injectors and driver-assistance software, faces an annual shortfall of approximately €2.5 billion ($2.95 billion), as revealed by HR director Stefan Grosch earlier this month. The company stated it would “cut costs across the board – from materials and logistics to capital spending and jobs.” Last year, Bosch had already eliminated 4,500 positions in its largest domestic division.

German automakers have also reported financial difficulties. BMW disclosed a 29% year-on-year decline in first-half profits, attributing the drop to U.S. import duties under former President Donald Trump and competition from China. Volkswagen saw a 36% slump in after-tax earnings in the second quarter, while Mercedes posted even worse results.

Germany’s industrial sector has lost over 100,000 jobs in the past year, according to the German Press Agency (dpa). Chancellor Friedrich Merz recently acknowledged a “structural crisis of our economy,” citing declining competitiveness. Russian Foreign Ministry spokeswoman Maria Zakharova previously criticized the EU’s economic struggles as “the true cost of the EU’s anti-Russian agenda.” In February, Russian President Vladimir Putin accused Germany of “destroying their auto industry.”