Automotive supplier Schaeffler plans to cut about 2,660 jobs in Germany and another 800 positions across the rest of Europe. The measure is part of a ‘cost improvement program’ aimed at saving Schaeffler around €300 million annually. The austerity drive is also related to electromobility.
With these measures, Schaeffler is responding to the crisis in the European automotive industry. The company specifically cites declining market demand and intensifying competition, driven by weaker sales of internal combustion engine vehicles and a delayed ramp-up of electromobility.
Schaeffler also highlights above-average labor costs per employee in Germany, as well as the high complexity of its organization, which has too many management levels and insufficient spans of control.
E-mobility not yet profitable
Schaeffler is not yet profitable in e-mobility. In fact, the corresponding division reported a negative EBIT margin of 14.8 % for the first nine months of the year, with losses under the EBIT method amounting to €571 million in this segment. In the electric vehicle segment, Schaeffler attributes its struggles to European automakers’ decline in the Chinese market. Nevertheless, the company remains highly committed to electromobility.
Regarding planned job cuts: about 50% will affect production, 30% will impact research and development, and 20% will involve other functional areas. A total of 16 sites across Europe will be affected. Five sites, four of which are in Germany, are set to close in the long term.
Workforce in Germany to be cut by another 9%
The sites to be closed in Germany include the Dortmund plant, which currently employs 430 people, and the Morbach site with 160 employees; both are part of the Powertrain & Chassis division and produce components for internal combustion engines.
Additionally, Schaeffler plans to discontinue operations at its Berlin site, which employs around 270 people, and to close the Schwalbach location. A significant portion of the approximately 385 employees in Schwalbach are expected to transfer to Schaeffler’s Frankfurt site.
Furthermore, Schaeffler intends to cease toolmaking activities at its Höchstadt site and adjust special machinery manufacturing at its Erlangen and Schweinfurt locations. The company also plans additional job cuts at German sites such as Herzogenaurach, Bühl, Höchstadt, Nuremberg, and Regensburg. In Belgium, the Schaeffler site in Herstal near Liège will close, and 15 employees will lose their jobs.
The planned reduction of 2,660 jobs in Germany represents a cut of around 9% of the country’s current workforce of just under 32,000. However, when including job cuts from earlier austerity programs and the 1,800 early retirement agreements already signed, the percentage increases to around 18%. Schaeffler says that the announced measures will be spread over 2027 and 2028.
The major workers’ union IG Metall and the Schaeffler works council have already reacted, saying that “this is not the way to build a future for Germany”. “Launching successive job reduction programs, closing sites and reducing the cost of personnel is not strengthening the German industry; it’s weakening it,” said Uli Schöpplein, president of the works council.
Restructuring the management
At the same time, Schaeffler aims to restructure its management. At least two of the current seven hierarchical levels below the executive board are to be eliminated, as reported by the German newspaper Handelsblatt. While Schaeffler does not specify an exact number, its press release emphasizes the aim of “reducing the complexity of the organization”.
Earlier this spring, the supervisory board decided to reduce the executive board to eight members by merging research and development with production, supply chain management, and procurement.
In addition to advancing its core business as an automotive supplier, Schaeffler sees promising growth opportunities in future fields, particularly in humanoid robotics and defense. “Here, we can draw on technological expertise developed in our core business,” says Jochen Schröder, Board Member for Production. In October, Schaeffler announced that it would assemble drones for the French army.
Schaeffler estimates the measures will improve annual earnings by €300 million from 2030. CEO Klaus Rosenfeld says that the one-off costs for the savings program are estimated at around €480 million. “Based on our strategic goal of becoming the leading Motion Technology Company, we view the Schaeffler Group’s broad cross-sector diversification as an important opportunity. We will do everything in our power to tap into new growth areas and, as far as possible, replace declining activities with new business,” he added.
