In wake of the ongoing slump in the auto sector, world's largest auto-part supplier Bosch Ltd will cut its India workforce by "a couple of thousands" in the next four years, Soumitra Bhattacharya, Bosch India Managing Director, has said.
The company would let go around 10 per cent of the total workforce of 3,700 white-collar employees in India as part of the company's strategy to transform amidst the downturn in the automotive sector, Bhattacharya said in an interview with Bloomberg. "There is a transformation happening across the industry. We looked at that as an opportunity to transform the company even before the downturn started," he told Bloomberg.
The German auto-part maker, which makes everything from braking systems to batteries, posted 66 per cent drop YoY in profit in the June-September quarter. Its automotive sales dived 17.5 per cent in the June quarter.
Bhattacharya, however, hoped Bosch would come out of the crisis in the next two-tree years. He attributed economic slowdown, liquidity crisis, regulatory changes and India's mega plan for green mobilty as reasons for falling sales.
Bosch had started restructuring parts of its business in light of a deepening slowdown in August 2019.
India's $57 billion automotive component industry, which accounts for 2.3 per cent of country's GDP and employs over 5 million people, has witnessed its worst ever half yearly performance with overall revenues registering a de-growth of 10.1 per cent at Rs 1.79 lakh crore in 2019-20.
This has resulted in around 100,000 people losing their jobs and an estimated investment loss of about $2 billion that would have happened had the industry continued to grow. The last time the industry had declined was back in 2013-14 when revenues had fallen by 2 per cent.
The overall effect of the poor performance of the auto sector has reflected in India's Goods and Domestic Product. The overall automobile industry, with a turnover of $120 billion, accounts for 49 per cent of the manufacturing GDP. India's GDP for the September quarter plunged to a six-year low of 4.5 per cent, largly impacted by a slump in manufacturing output.