Schaeffler to cut 4700 jobs, close two sites

Automotive supplier Schaeffler is to cut up to 4700 jobs in Europe and close two sites.

The move comes after the integration with Vitesco and the slow down in the electric vehicle market. Ten sites in Germany will also see reductions for 2800 roles with plants in Taiwan and Hameln, Germany. The layoffs and closures is aimed at making savings of €290m a year by 2029, but will cost €580m.

600 staff will go as a result of the merger with Vitesco last month that increased the company headcount by around 35,000 to approximately 120,000.

The third strand encompasses measures stemming from the ongoing transformation of the automotive supply industry. These include measures relating to the declining volume in combustion engine technology and the current weakening of new programmes for electric drives in Europe. The measures therefore affect both the company’s Powertrain & Chassis division and its E-Mobility division. 

• Pilot of Siemens AI copilot for automotive production
• Solid state battery development

Regensburg will become the headquarters of Powertrain Solutions within the Powertrain & Chassis division, while the headquarters of Schaeffler’s new E-Mobility division will be in Herzogenaurach, which will continue to be the location of the Schaeffler Group’s corporate headquarters.

The slowdown in the EV market means previously anticipated stronger growth levels, particularly from European OEMS, have so far failed to materialize, and there is greater price and cost pressure that is driving the need for greater localization of R&D services. This will impact R&D at the Regensburg, Nuremberg and Berlin sites in particular. Similar cuts of 1300 jobs took place in 2022.

The downsizing measures will affect 10 locations in Germany and five elsewhere in Europe are affected as well, including two that are set to close by 2027.

“By taking the measures announced today we will tackle three issues. Firstly, we will get our bearings and industrial business back on track. Secondly, we will realize cost synergies from the merger with Vitesco Technologies. And thirdly, we will continue the transformation of our Powertrain & Chassis and E-Mobility divisions. Given the current business environment, this program is necessary to safeguard the Schaeffler Group’s competitiveness over the long term,” said Klaus Rosenfeld, CEO of Schaeffler AG.

The Bearings & Industrial Solutions plant in Homburg is home to the production of components for drive systems, guides and mechatronic system solutions from the linear technology business. The activities of the linear technology business will be relocated to consolidate them in response to persistently weak demand in the Industrial Automation sector.

The division’s main plant at Schweinfurt will take over the production operations and workforce of the nearby Ewellix linar motion plant, while the former Ewellix location in Taoyuan. Taiwan, will be closed.

In Hameln, Schaeffler will discontinue the activities of Melior Motion, a company it acquired in 2022, and is looking at selling the plant, which specialises in the manufacture of planetary gearboxes for industrial robots.

The job reductions will be achieved primarily by means of natural attrition, voluntary exit programs, and separation and part-time early retirement agreements.

“We are working in close consultation with our employee representatives, and our shared understanding is that the measures will be implemented in a fair and socially equitable manner on the basis of the Future Accord,” said Dr. Astrid Fontaine, Chief Human Resources Officer of Schaeffler AG. “Moreover, we will continue to invest in upskilling and professional development, with a strong focus on our home locations in Germany.”

ince 2022, around 40,000 employees across Europe have taken part in upskilling and reskilling programs that have given them the qualifications they need to successfully engage with new areas and key emerging technologies, including almost 19,000 in Germany. Ongoing training and development is one of the keys to taking as many of our employees as possible with us on our journey.

“The structural measures are an important step towards safeguarding Schaeffler’s competitiveness,” said Rosenfeld. “In the current market and competitive situation, there is simply no alternative to these measures. Our commitment to Germany as a business location is undiminished. In the interests of our customers and employees, we will continue to invest in areas and technologies of key importance for the future, including in Germany and wider Europe.”