One month after its merger with Vitesco, the German automotive and industrial supplier Schaeffler announced that it would cut 4,700 jobs in Europe, including 2,800 in Germany. This corresponds to around 3.1 percent of the total workforce. It was still unclear on Tuesday morning to what extent Schaeffler Austria, with around 466 employees and production in Berndorf at the end of 2023, would be affected.
Ten locations in Germany and five more in Europe were affected, the company, which employs 120,000 people worldwide after the merger, announced at its headquarters in Herzogenaurach, Franconia. Two of the five European locations are to be closed completely. The package of measures will be implemented between 2025 and 2027. From 2029 onwards, 290 million euros will be saved per year. 75 million euros of this would be related to the merger with Vitesco.
“The program is necessary in the current environment to ensure the long-term competitiveness of the Schaeffler Group. We will implement it in a socially responsible manner and with a sense of proportion,” said Schaeffler CEO Klaus Rosenfeld. “If you delay structural adjustments – you see this with others – you are later forced to take radical measures,” he told the German Press Agency.
Staff cuts of around three percent
The announced staff cuts correspond to around 3.1 percent of the total workforce. However, some jobs will also be relocated within Europe or to non-European countries, so Schaeffler is talking about a net reduction of 3,700 jobs. The employee representatives react angrily and demand that alternatives be explored. CEO Rosenfeld says: There are no alternatives.
There are three main reasons behind the plans: The business with bearings for wind turbines, for example, is slowing down – because of competition from China. “The Chinese are attacking in the wind sector,” says Rosenfeld. The transformation of the automotive industry towards e-mobility is taking place more slowly than planned. “The reduction of around 600 jobs is due to cost synergies from the merger with Vitesco,” says Rosenfeld. Just a few weeks ago, Schaeffler absorbed the electric drive specialist from Regensburg and became one of the world’s ten largest companies in the supply industry with a total of around 120,000 employees.
In the first nine months, Schaeffler – still without Vitesco – did comparatively well economically. Sales rose by one percent after adjusting for currency effects to 12.233 billion euros. The car division also rose by 0.2 percent after adjusting for currency effects – primarily due to further incoming orders in e-mobility. Before special items, interest and taxes, there was a profit of 713 million euros for the first nine months, after 964 million euros in the same period of the previous year.
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**Interview with Klaus Rosenfeld, CEO of Schaeffler Group, on Recent Job Cuts Post Merger with Vitesco**
**Interviewer:** Thank you for joining us, Klaus. One month after the merger with Vitesco, Schaeffler announced significant job cuts, totaling 4,700 positions. What were the primary factors that led to this decision?
**Klaus Rosenfeld:** Thank you for having me. The decision to reduce our workforce, which represents about 3.1 percent of our total employees, was not made lightly. There are three main reasons. Firstly, we are facing increased competition in specific sectors, such as wind turbine bearings from Chinese manufacturers. Secondly, the transition to e-mobility in the automotive industry is occurring more slowly than we initially anticipated. Lastly, we need to achieve cost synergies from our recent merger with Vitesco, contributing to around 600 of the job reductions.
**Interviewer:** This massive reduction has understandably triggered concerns among employees and unions. Can you discuss how Schaeffler plans to manage these layoffs responsibly and what alternatives were considered?
**Klaus Rosenfeld:** I understand the concerns of our employees deeply. We are committed to implementing these changes in a socially responsible manner, with sensitivity to the impacts on our workforce. However, despite thorough assessments, we did not find viable alternatives that could have mitigated the job cuts. Delaying necessary structural adjustments can lead to much more radical measures in the future, which we want to avoid.
**Interviewer:** The plan is set to unfold between 2025 and 2027. What steps will Schaeffler take to support affected employees during this transition?
**Klaus Rosenfeld:** We are currently developing support measures, including severance packages, career counseling, and assistance with job placements for those affected. We will be transparent throughout the process and keep lines of communication open between management and employees to provide necessary support during this challenging time.
**Interviewer:** Looking beyond the job cuts, how do you see Schaeffler positioning itself in the market, especially regarding e-mobility and other core business areas?
**Klaus Rosenfeld:** E-mobility remains a vital part of our strategy moving forward, and we are still seeing growth in that segment, with a slight increase in our automotive division sales recently. Despite current challenges, we believe that with the right adjustments, including this strategic workforce management, Schaeffler will emerge as a more competitive player in the global market, continuing to innovate and adapt to the evolving needs of the industry.
**Interviewer:** Thank you, Klaus, for sharing your insights during this challenging time for Schaeffler and its employees.
**Klaus Rosenfeld:** Thank you for the opportunity to explain our position. It’s important to us that we maintain clarity and support as we navigate these changes.
