A bad first year GPA makes it harder to get research jobs. Lack of research experience makes it harder to get into grad school. Not to mention, bad foundations in core courses will probably make it harder to succeed in higher-level courses, unless you're only getting bad grades in institute requirements that have no bearing on your future plans. GPA is very important, even in the first year, but with enough effort you can usually improve.
That being said, if you're only at midterms, you don't even know how you'll do for the semester, let alone the year. Maybe your teachers will be better next semester and you'll do better. Who knows.