Schaeffler to cut 4k jobs in major ‘transformation’ scheme

Herzogenaurach, Germany - Auto components supplier Schaeffler Group is to cut 4,400 jobs in Germany and Europe by the end of 2022, in response to a “sharp drop in demand” following the global outbreak of Covid-19. 

The German group introduced, on 9 Sept, a package of measures, which it said aimed to downsize capacity, consolidate locations, and strengthen overall competitiveness. 

The automotive supplier expects the restructuring costs to come in at €700 million, delivering annual savings of €250–€300 million, to be 90% realised by 2023.

“Although in recent months demand has picked up across all of Schaeffler’s three divisions and four regions, uncertainty surrounding the pandemic outlook and the resulting economic downturn remains high,” said Schaeffler in a statement. 

Moreover, the group anticipates overcapacity at its production plants, given the projections of slow market recovery for the five years to 2025.

The recently announced changes, according to Schaeffler, will relate mainly to twelve locations in Germany and two further locations elsewhere in Europe.

As a result, Schaeffler’s larger locations in Herzogenaurach, Bühl, Schweinfurt, Höchstadt and Homburg will undergo measures such as capacity downsizing and consolidation.

As part of that, the group aims to establish a hydrogen technology laboratory facility at its Herzogenaurach headquarters and focus on e-mobility solutions for OEMs at its location in Bühl.

However, according to Schaeffler, most of the impact of the restructuring package will be felt at locations with “technologically obsolescent product portfolios or highly fragmented plant structures."

Such locations include the Wuppertal, Luckenwalde and Eltmann plants, the group's engineering location in Clausthal-Zellerfeld, and its automotive aftermarket operations in Hamburg and Cologne.

Schaeffler said it would outline the specifics of the plans for each location during local employee meetings. 

The restructuring move follows a major reorganisation scheme launched in 2018, which involved the adjusting of European production footprint and streamlining structures in line with the automotive industry's transformation.