Schaeffler to cut 3,460 jobs and close five plants in Europe
German automotive supplier Schaeffler is downsizing operations in response to weak vehicle demand and a slower-than-expected shift to electric mobility.
Schaeffler AG has announced plans to close five manufacturing facilities in Europe, resulting in the elimination of 3,460 jobs. Approximately 75% of the affected positions are located in Germany, where the company cites high labor costs as a primary driver for the restructuring. The move comes as the supplier, which serves major automakers including BMW and General Motors, contends with a sharp decline in internal combustion engine demand and sluggish electric vehicle market growth.
CEO Klaus Rosenfeld stated that the organization must adjust its structure to remain competitive, noting that German production costs are roughly 2.5 times higher than in other European regions. To mitigate the impact, management will see a 10% reduction in base salaries, and the company intends to eliminate two management layers. The restructuring is projected to yield annual savings of 300 million euros by 2030.
The plan has faced significant backlash from the German metalworkers' union, IG Metall, which argues that the repeated waves of layoffs threaten the company's industrial foundation in Germany. Amid the restructuring, Schaeffler is attempting to diversify its portfolio, exploring opportunities in defense and humanoid robot components as the automotive sector remains volatile.