The German parts manufacturer Schaeffler is under such pressure that the management is dismissing 4,700 employees and closing several factories in an attempt to save the company.
Schaeffler, one of Germany's major manufacturers of auto parts, plans to carry out extensive layoffs. More precisely, around 4,700 employees will be affected, and the decision also entails the closure of two of the company's factories.
The background for the decision is the decline in Germany's car industry, where major players such as Volkswagen have experienced a significant decline.
Development has spread to several links in the supply chain and affects companies such as Schaeffler, which supply essential components to car manufacturers. Schaeffler is, among other things, an important supplier to Volkswagen, which has struggled with economic challenges in recent years.
According to Bloomberg, the majority of the planned layoffs, 2,800 to be exact, will take place at 10 different Schaeffler locations in Germany.
Schaeffler expects to save around 290 million euros per year, corresponding to approximately 2.16 billion Danish kroner, as a result of the planned cuts. The goal is to reduce costs until the end of 2029 and thus adapt operations to the lower demand in the market.
READ ALSO: Closed completely in 2020 – now the car brand will be revived
Although the number of positions directly affected by the closures is estimated at 4,700, not all employees will be made redundant. Schaeffler has said some employees will be redeployed internally, reducing the total number of actual layoffs to about 3,700.
The economic downturn in the German car industry has not only affected Schaeffler. Other major players in the industry, including companies such as Robert Bosch and ZF Friedrichshafen, have also been forced to downgrade their earnings expectations for 2024.
ZF Friedrichshafen has further announced that the company expects to cut 14,000 positions by 2028 as part of a major restructuring. Other companies in and around the German car industry are under such pressure that they have already succumbed. This applies, for example, to a car brand that went bankrupt for the second time earlier this year. Read more about it here .
Schaeffler's share price has also suffered from the general downturn in the auto industry, with the stock down nearly 20 percent in 2024.
The spare parts manufacturer Schaeffler, like many others in the car industry, is in such great economic trouble that 4,500 people have to be laid off and entire factories closed.
Read more exciting news from and about the world of cars right here!
