Schaeffler will close five sites in Europe and cut jobs as the supplier faces a persistent downturn in demand for auto components and high costs in Germany.

The company will eliminate 3,460 jobs in Europe, with about three-quarters of those cuts in Germany, the maker of ball bearings and hybrid-electric drivetrains said on Nov. 3.

The measures are expected to yield about €300 million ($336 million) in annual savings from 2030 and result in about €480 million in one-time expenses. The cutbacks are aimed at reducing overcapacity and complexity, as well as scaling back research and development activities.

Schaeffler said the measures were intended to ensure the company could continue to manufacture and develop products competitively in Germany and Europe.

CEO Klaus Rosenfeld said conditions for Germany’s auto industry had worsened significantly since Schaeffler announced its previous restructuring program in 2024. Production volumes are falling more sharply than expected.

“We need to adjust our structures here so that we can continue to operate competitively in the future,” Rosenfeld said in an interview. “Hoping for things to improve isn’t enough, we have to actively address the problems, and one of them is the significantly higher personnel costs we have here.”

Top executives will take a pay cut

Schaeffler’s top executives will give up 10 percent of their base salary, Rosenfeld said. The company also plans to eliminate two management levels. Smaller pay reductions further down the hierarchy may help lower personnel costs and reduce the number of jobs that need to be cut, he said.

Schaeffler plans to close four plants in Germany and one in Belgium, while job cuts will affect 16 sites. The supplier said the cuts would eliminate about 2,660 jobs in Germany, its largest market, representing about 9 percent of its German core workforce.

The latest measures come only weeks after Schaeffler said it had completed ahead of schedule its earlier restructuring program. That plan, announced in November 2024, targeted 4,700 job reductions in Europe and about €290 million in annual savings by 2029.

Schaeffler has been hit by declining demand for combustion-engine components, while EV programs have ramped up more slowly than expected, leaving excess production and development capacity.

Union says cuts weaken Germany’s industrial base

Labor union IG Metall and Schaeffler’s group works council criticized the new restructuring plan, saying repeated rounds of job cuts and site closures were weakening the company’s German industrial base.

“One restructuring program now follows the next before the consequences of the previous one have even been dealt with,” said Thomas Höhn, IG Metall’s representative for Schaeffler. “That is not a strategy for the future of Germany as an industrial location.”

Schaeffler is seeking new areas of growth beyond its automotive business as it pushes to diversify into other markets. The company is expanding into components for humanoid robots and the defense sector.

Schaeffler has about 109,000 positions globally. The company is No. 14 on the Automotive News list of the top 100 global suppliers, with worldwide sales to automakers of $18.6 billion in 2025.

Reuters contributed to this report