German auto parts supplier to cut thousands of jobs and close five sites

German auto parts supplier Schaeffler announced plans to cut nearly 3,500 jobs and close five European sites as the automotive industry faces a deepening crisis. The cuts, to be completed by 2028, will account for about 3% of the company's global workforce of almost 110,000 employees. Most of the job losses and site closures will occur in Germany, where the company cited above-average costs for workers as a key factor.

Schaeffler attributes the need for these measures to a "persistently challenging environment" in the automotive industry, noting a decline in demand for internal combustion engine vehicles and a slow shift towards electric mobility.

The company's decision to downsize is primarily focused on production and research and development, with closures scheduled in Berlin, Dortmund, and two other towns in western Germany, along with a Belgian facility. Additionally, job cuts will be implemented at Schaeffler sites in France and Slovakia. While Schaeffler is not as well-known as established automakers like Volkswagen, BMW, or Mercedes, these German suppliers play a crucial role in the auto ecosystem, providing essential components such as braking systems and in-car electronics.

As their customers struggle with competition from Chinese manufacturers, high production costs, and weakening demand, suppliers like Schaeffler have been significantly impacted. Volkswagen plans to reduce its workforce by around 120,000 jobs by 2030, while German industrial giant Bosch recently announced 13,000 job cuts, mostly within its auto division.