German auto supplier Schaeffler plans to cut more than 3,000 jobs and close five sites in Europe, marking another blow to the region as its automotive sector struggles with mounting industry challenges.
The details: Schaeffler, which supplies parts to Volkswagen, Mercedes-Benz and Porsche, announced the cuts Tuesday as Europe's auto industry grapples with weaker demand for gas-powered vehicles, slowing EV demand and intensifying competition, Reuters reported.
The German supplier's restructuring plan will affect 16 sites, including the closure of four plants in Germany and one in Belgium.
Roughly 2,660 jobs, or about 9% of Schaeffler's core German workforce, will be eliminated by 2028, with total job cuts estimated at 3,460.
The restructuring also includes a 10% pay cut for Schaeffler's management board over two years.
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What they’re saying: "Our personnel costs in Germany are around 2.5 times higher than in other European countries," CEO Klaus Rosenfeld told Reuters, saying the measures should ensure Schaeffler can continue to develop and manufacture products competitively in Germany and Europe despite significantly higher labor costs.
Dealer angle: Schaeffler's restructuring adds another layer of uncertainty to the European automotive supply chain, potentially affecting parts availability and production schedules for automakers with U.S. dealer networks.
By the numbers: Schaeffler is the latest German automotive company to announce major job cuts as manufacturers and suppliers across Europe restructure operations to improve profitability.
Volkswagen Group's restructuring plan includes cutting another 50,000 jobs and shuttering production at four German plants in Emden, Zwickau, Hanover and Neckarsulm.
Porsche plans to eliminate another 5,000 jobs through natural attrition and voluntary programs, following a February 2025 agreement to cut 3,900 positions, plus another 500 tied to subsidiary closures.
BMW aims to cut approximately 8,000 jobs globally, or about 5% of its 150,000-person workforce.
Mercedes-Benz said in September that it plans to cut $911 million in German labor costs, with management urging employees to increase productivity and meet cost-cutting targets, according to a Reuters report.
Big takeaway: Schaeffler's job cuts highlight the growing pressure on Europe's automotive industry to reduce costs and remain competitive amid shifting demand and rising expenses, with potential long-term implications for vehicle supply, parts availability, and the competitiveness of European brands in the U.S. market.
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