Schaeffler, a German automotive and industrial supplier, has announced plans to cut approximately 4,700 jobs across Europe.
This decision is part of a move to bolster the company’s long-term competitiveness in a “challenging market environment”, characterised by intense global competition and significant changes within the automotive supply industry, the company said.
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Schaeffler’s board has approved structural measures with a focus on Germany and Europe to improve earnings, particularly within the bearings & industrial solutions division.
This division has been facing economic difficulties, structural issues, and fierce competition.
Additionally, Schaeffler aims to achieve synergies following its merger with Vitesco, which will include revenue and purchasing benefits, as well as some workforce reductions.
The third aspect of the restructuring plan is a response to the ongoing transformation in the automotive supply sector.
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By GlobalDataThis involves adapting to the decreasing demand for internal combustion engine technology and the current slowdown in new electric drive programmes in Europe.
Specifically, the job cuts will result in a gross reduction of about 4,700 positions, with nearly 2,800 of these in Germany.
Ten locations in Germany and five elsewhere in Europe will be affected, including the closure of two sites.
The majority of these measures are scheduled to be implemented between 2025 and 2027.
Schaeffler anticipates these structural changes will lead to potential annual savings of approximately €290m ($311.7m) starting in 2029.
Schaeffler CEO Klaus Rosenfeld said: “Given the current business environment, this program is necessary to safeguard the Schaeffler Group’s competitiveness over the long term. We will implement it in a socially equitable and carefully considered manner.”
The announcement follows a drop in the company’s net income attributable to shareholders, which decreased to €250m in the first nine months of 2024, compared with €416m in the previous year.
Despite this, revenue remained relatively stable at €12.23bn for the reporting period.
