Schaeffler to cut 3,460 jobs in Europe and close five production sites by 2028

Schaeffler, the German company that supplies parts to Volkswagen, is to cut 3,460 jobs in Europe. It will also close five of its production sites. The company wants to complete the entire restructuring by 2028.

Three reasons have been given for the decision: lower demand for vehicles, growing competition from Chinese companies and a slow shift towards electric vehicles.

According to Schaeffler's announcement, four of the five sites to be closed are in Germany and one is in Belgium. About 75 per cent of the total job cuts will fall in Germany. The company currently employs about 1.09 lakh people worldwide. It has 31,957 employees in Germany, and about 9 per cent of those posts will be eliminated. Counting the 2024 cuts, its workforce in Germany will shrink by about 18 per cent.

Schaeffler makes vehicle components such as bearings and hybrid-electric drivetrains. It also supplies carmakers such as General Motors and BMW. Demand for petrol and diesel vehicles is falling, but production of electric vehicles has not grown at the expected pace. Chinese manufacturers are also competing at lower prices. The company has said that its staff costs in Germany are about two and a half times those in the rest of Europe.

The company expects the cuts to save about 300 million euros a year from 2030. However, it will have to spend a one-time 480 million euros on the restructuring. Senior executives' basic salaries will be cut by 10 per cent, and two levels of management are also planned to be removed. The emphasis will be on spending on research and development and on reducing surplus production capacity.

In November 2024, the company had announced a plan to cut 4,700 jobs in Europe. Its target then was to save 290 million euros a year by 2029. Schaeffler is now also looking for opportunities in new businesses such as humanoid robots and making components for the defence sector, in an effort to reduce its dependence on the automobile industry.