German automotive parts supplier Schaeffler announced plans to cut 3,460 jobs and close five European sites as the company grapples with structural challenges facing the auto industry [1]. Approximately 2,660 of the job cuts and four of the five site closures will occur in Germany, affecting plants in Dortmund, Morbach, Berlin, and Schwalbach that manufacture internal combustion engine components, with toolmaking ceasing at Höchstadt [1]. The restructuring will reduce Schaeffler's German core workforce by approximately 18% by 2028 when combined with earlier programs and 1,800 signed partial-retirement agreements [1]. The company forecasts an annual earnings boost of roughly 300 million euros ($336 million) from 2030 as a result of these efficiency measures [1].
Schaeffler's restructuring reflects broader challenges facing Europe's automotive sector, driven by weaker demand for combustion engine components, slower-than-expected electric vehicle adoption, and continued losses in EV operations [1]. The company reported a 0.2% year-on-year revenue decline to 5.8 billion euros in the third quarter and a 7.2% fall in earnings before interest and taxes to 245 million euros [1]. CEO Klaus Rosenfeld emphasized that Europe must defend its industrial base while pursuing new opportunities in defense, robotics, and automation [1]. The challenges extend beyond Schaeffler, with new car registrations in the European Union declining from 15.3 million units in 2019 to 10.8 million units in 2025 [1].
The automotive sector faces what ING's senior sector economist Rico Luman described as an "unprecedented transition which can't be stopped," with German industry confronting significant structural headwinds [1]. Schaeffler's difficulties are compounded by "above-average costs per employee in Germany" and "too many management levels," according to the company [1]. The broader industry context includes Volkswagen's massive strategic overhaul resulting in approximately 100,000 job cuts and numerous plant closures [1]. Battery electric vehicles accounted for 22.7% of new registrations in the European Union in the 12 months to September, indicating accelerating EV adoption despite the sector's current struggles [1].
CONCLUSION
Schaeffler's announcement of 3,460 job cuts and five site closures signals deepening structural challenges in Germany's automotive supply chain, driven by overcapacity, high costs, and slower-than-expected EV transition [1]. The restructuring reflects an industry-wide crisis affecting major players like Volkswagen, with the company targeting 300 million euros in annual earnings improvements by 2030 [1]. This represents a critical inflection point for European automotive manufacturing as the sector navigates technological disruption and intensifying competition from Chinese brands [1].