Germany's Schaeffler to cut 4,700 jobs

German industrial and automotive supplier Schaeffler announced on Tuesday plans to cut 4,700 jobs in Europe, one month after its merger with Vitesco.

The company said that 2,800 of the jobs to be cut are in Germany. This corresponds to around 3.1% of the total workforce.

Schaeffler, which employs 120,000 people worldwide, said 10 locations in Germany and five other locations in Europe will be affected.

Two of the five European sites are to be completely closed. The measures will be implemented between 2025 and 2027, with savings of €290 million ($316 million) per year expected from 2029. Of this, €75 million is related to the merger with Vitesco, the company said

"Given the current business environment, this programme is necessary to safeguard the Schaeffler Group’s competitiveness over the long term. We will implement it in a socially equitable and carefully considered manner," said Klaus Rosenfeld, Schaeffler's chief executive.

In the first nine months, Schaeffler, still excluding Vitesco, reportedly performed relatively well economically. Revenues increased by 1% on a currency-adjusted basis to €12.23 billion.

The automotive division also saw a 0.2% currency-adjusted increase, primarily due to further orders in e-mobility.

Before special effects, interest and taxes, a profit of €713 million was recorded for the first nine months, compared to €964 million in the same period the previous year.

Trade union denounces decision

Employee representatives reacted angrily to the announcement.

In a statement, Schaeffler's central works council said the measures were not proportionate.

The trade union IG Metall also urged the company's management to explore other options. A district manager from the union, Horst Ott, said: "I call on the company to enter into talks with the employee side about alternatives to job cuts."