German auto parts and machinery maker Schaeffler AG is to cut 4,700 jobs in Europe, demonstrating that the struggle of Volkswagen and other big European car makers has begun affecting further down-the-line companies in the supply chain.
The job cuts are part of what the company described in a statement as structural measures due to "lower automotive production in Europe and ongoing weakness in various industrial sectors".
The structural measures, to "secure the long-term increase in the company's competitiveness", include consolidating production and adjusting capacities, leading to the relocation and closing two of its factories outside of Germany. Those will be announced by the end of the year.
The job cuts will mainly take place in Germany, where around 2,800 jobs will be lost at 10 sites. Five other sites in Europe are affected.
After relocating a number of positions, the overall net job cuts will shrink to 3,700, about 3.1% of the company's workforce.
The measures will be taken between 2025-2027 and are expected to save €290m by the end of 2029.
The announcement came on the day that the company posted its result from the third quarter of the year, reporting adjusted earnings before interest and tax coming in at 45% lower than the previous year to €187m.
Schaeffler's shares were down about 1.9% in Frankfurt before midday.
As the German car industry faces mounting challenges, other car parts suppliers are also announcing restructuring plans.
The world's largest automotive supplier, Bosch, has cut its forecast as a result of the economic downturn and is not ruling out additional job cuts, above and beyond the more than 7,000 jobs already announced, according to a report from German newspaper Der Tagesspiegel.
Meanwhile, another auto supplier ZF Friedrichshafen AG plans to cut up to 14,000 jobs in Germany by the end of 2028.