Schaeffler announces job cuts

Schaeffler's Board of Managing Directors has decided on structural measures aimed at improving the company's long-term competitiveness. The regional focus is on Germany and Europe. According to the company, this is in response to the challenges of a difficult market environment, increasing global competitive pressure and the transformation in the automotive supply industry.

The Management Board names three main areas:

1. Improvements in the Bearings & Industrial Solutions division: The division is under pressure due to the current economic downturn, structural challenges and increasing competition. Planned measures are intended to improve earnings and ensure competitiveness.
2. Synergies through merger with Vitesco: The aim here is to achieve savings through sales and purchasing synergies, but also through personnel adjustments.
3. Transformation in the automotive industry: The ongoing transformation in the automotive industry, in particular the decline in combustion technology and weaker demand for e-drives in Europe, is leading to adjustments in the Powertrain & Chassis and E-Mobility divisions, according to the company.

Around 2800 jobs affected in Germany

The agreed measures provide for a gross reduction of around 4,700 jobs in Europe, including around 2,800 in Germany. Restructuring measures will reduce the net reduction to 3,700 jobs, according to the press release. Ten locations in Germany and five locations in Europe are affected, two of which are to be closed. The majority of the measures are to be implemented between 2025 and 2027.

According to the company, the measures in Germany are to be implemented in a socially responsible manner and are based on the future agreement reached with IG Metall in 2018. The job cuts are to be achieved through natural fluctuation, voluntary programs as well as severance and partial retirement agreements. Schaeffler plans to continue investing in the qualification and training of its employees.

Those responsible expect the structural measures to generate annual savings potential of around 290 million euros from 2029, of which around 75 million euros will be attributable to cost synergies from the merger with Vitesco. The implementation of the measures will require one-off expenses of around 580 million euros.

Klaus Rosenfeld, CEO of Schaeffler AG, explained: "With the measures announced today, we are getting our bearing and industrial business back on track, realizing synergies from the merger with Vitesco and driving forward the transformation of our Powertrain & Chassis and E-Mobility divisions. The program is necessary to secure the Schaeffler Group's long-term competitiveness. We are implementing the measures in a socially responsible manner and with a sense of proportion."

Structural adjustments at Bearings & Industrial Solutions

The Bearings & Industrial Solutions division has already implemented measures such as the reduction of flexitime accounts, short-time working and reduced working hours. In the future, it will be necessary to consolidate activities and capacities in order to optimize the cost base. This will primarily affect the Schweinfurt and Homburg sites, where additional adjustments will be made.

The merger with Vitesco should enable synergies of 600 million euros per year, which will be achieved primarily through growth and economies of scale in purchasing. Personnel measures in the central departments at the Regensburg and Herzogenaurach sites will also contribute to reducing costs. The Powertrain Solutions division will be based in Regensburg in the future, while the E-Mobility division will be located in Herzogenaurach.