German car parts manufacturer Schaeffler to reduce workforce in Europe
Date
11/5/2024 7:53:21 AM
(MENAFN) German car parts manufacturer Schaeffler has announced a significant reduction in its workforce, revealing plans to cut 4,700 jobs across Europe due to ongoing challenges within the automotive industry. This decision was attributed to a combination of factors, including an increasingly competitive global market and the ongoing transformation processes affecting the automotive supply sector. The company emphasized that these measures are necessary to adapt to the changing landscape and to ensure its long-term viability.
Of the total job cuts, approximately 2,800 positions will be eliminated at ten locations within Germany, alongside the closure of two sites. This restructuring is part of a broader strategy aimed at achieving annual savings of around €290 million (approximately USD316 million) by the end of 2029. The announcement underscores the serious financial pressures faced by automotive suppliers as they navigate a rapidly evolving industry.
Schaeffler's decision comes on the heels of a disappointing financial performance, as the company reported a staggering 45 percent decline in adjusted earnings before interest and tax (EBIT), dropping to €187 million in the third quarter of 2024 compared to the previous year. This financial downturn reflects the challenges posed by reduced demand and shifting consumer preferences within the automotive market.
The job cuts at Schaeffler are part of a wider trend in the German automotive sector, which has been facing significant restructuring challenges. Just last week, Volkswagen announced plans to close at least three plants in Germany and lay off thousands of employees, further highlighting the precarious state of the industry as companies adjust to new economic realities and the transition towards electric vehicles.
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