Job Cuts Ahead: Schaeffler To Lay Off 4,700 Employees
The announcement comes after the company's operational profit was almost cut in half during a challenging third quarter.
On Tuesday, Schaeffler revealed plans to cut 4,700 jobs throughout Europe as a result of persistent difficulties in the automobile industry. The announcement comes after the company's operational profit was almost cut in half during a challenging third quarter.
With some 2,800 jobs to be eliminated across ten sites, Germany will be the most severely affected, while other layoffs would be distributed among other European countries, according to a Reuters report.
Reuters reported that Schaeffler said the planned layoffs were a reaction to "the challenging market environment, the increasing intensity of global competition, and ongoing transformation processes affecting the automotive supply industry."
Wider issues confronting the European auto industry, such as growing expenses, the transition to electric cars, dwindling demand, and heightened competition from Chinese producers, intensify these constraints.
The research estimates that Schaeffler will have to pay about 580 million euros up front for its cost-cutting measures, which are expected to save about 290 million euros a year by 2029. Site closures and staff relocations will account for the majority of layoffs, which will result in a net reduction of roughly 3,700 positions, or 3.1% of the company's 120,000-person workforce.
According to the report, Schaeffler's earnings before interest, taxes, and special items fell 44.9% to 187 million euros in the third quarter, falling short of analysts' forecasts of 209.4 million euros. This decrease reflects difficulties encountered by other European auto suppliers, such as Sweden’s SKF and France’s Valeo, both of which reported similar downturns in the European and Chinese markets.
Schaeffler had already planned to reduce administrative positions after expanding its workforce through a recent merger with electric powertrain expert Vitesco. Notwithstanding the obstacles, Schaeffler is committed to completing the merger effectively and adjusting to the automotive industry's quick changes, especially the move towards electric vehicles.
The labour and energy costs in Germany's automobile sector are among the highest in Europe. Even Volkswagen, the biggest automaker in Europe, has considered closing domestic operations as a result of this difficult situation. The company's decision was made in the midst of disputes with unions over planned wage reductions. Due to persistent difficulties in the automobile industry, Schaeffler said on Tuesday that it would be laying off 4,700 employees throughout Europe.
The statement comes after a challenging third quarter in which the company's operational profit was almost cut in half.
According to a Reuters story, Germany will be the most severely affected, with over 2,800 jobs to be eliminated across ten sites, while other layoffs will be distributed throughout other European locations.
According to Reuters, Schaeffler said the planned layoffs were a reaction to "the challenging market environment, the increasing intensity of global competition, and ongoing transformation processes affecting the automotive supply industry." Wider issues confronting the European auto industry, such as growing expenses, the transition to electric cars, dwindling demand, and heightened competition from Chinese producers, intensify these constraints.
The research estimates that Schaeffler will have to pay about 580 million euros up front for its cost-cutting measures, which are expected to save about 290 million euros a year by 2029. Site closures and staff relocations will account for the majority of layoffs, which will result in a net reduction of roughly 3,700 positions, or 3.1% of the company's 120,000-person workforce.
According to the report, Schaeffler's earnings before interest, taxes, and special items fell 44.9% to 187 million euros in the third quarter, falling short of analysts' forecasts of 209.4 million euros. Other European car suppliers like Sweden's SKF and France's Valeo, who also reported comparable declines in the European and Chinese markets, are also facing difficulties as a result of this reduction.
Schaeffler had already planned to reduce administrative positions after expanding its workforce through a recent merger with electric powertrain expert Vitesco. Notwithstanding the obstacles, Schaeffler is committed to completing the merger effectively and adjusting to the automotive industry's quick changes, especially the move towards electric vehicles.
The labour and energy costs in Germany's automobile sector are among the highest in Europe. Even Volkswagen, the biggest automaker in Europe, has considered closing domestic operations as a result of this difficult situation. The company's decision was made in the midst of disputes with unions over planned wage reductions.
