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Schaeffler to lay off 4,700 jobs amid challenges in Europe’s auto sector
Industry News- Nov 07,24
Overall, the job cuts will affect around 3.1% of Schaeffler's workforce of 120,000, which increased after its merger with electric powertrain specialist Vitesco.
German automotive parts manufacturer Schaeffler has announced plans to cut 4,700 jobs in Europe after its operating profit nearly halved in the third quarter, signaling deeper troubles in the European automotive industry. The company attributed the decision to a challenging market environment, escalating global competition, and ongoing transformation in the automotive supply sector.
The European automotive market is facing significant pressures, including high production costs, the transition to electric vehicles, declining demand, and increasing competition from China. Volkswagen, Europe’s largest carmaker, is considering plant closures in Germany, citing high labor and energy costs, and is negotiating a 10% wage cut with unions.
Schaeffler will make the largest reduction in Germany, with plans to cut approximately 2,800 jobs across ten sites. Additional cuts will be spread across other European locations, including two site closures, though the company has not disclosed the specific locations.
Overall, the job cuts will affect around 3.1% of Schaeffler's workforce of 120,000, which increased after its merger with electric powertrain specialist Vitesco. Of the layoffs, about 1,000 jobs will be lost through displacement, bringing the net number of job reductions to 3,700.
The company is finalising the merger and expects it to result in the elimination of some administrative positions. Schaeffler anticipates annual savings of around €290 million by 2029 through its efficiency plan, which will cost an estimated €580 million.
Schaeffler’s earnings before interest, taxes, and special items dropped by 44.9% to €187 million for the July-September period, missing analysts' expectations. The company joins other automotive suppliers, such as Sweden’s SKF and France’s Valeo, in reporting disappointing quarterly results, with weak sales in both Europe and China contributing to the downturn.
(moneycontrol)
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