Schaeffler axes 3,460 jobs and shuts five European sites as German autos bleed

Schaeffler is slashing 3,460 jobs and closing five sites across Europe, the German car parts maker announced Tuesday. About 2,660 of those cuts and four of the closures land in Germany, hitting plants in Dortmund and Morbach that build internal combustion engine components. Berlin and Schwalbach are also getting shuttered, and toolmaking ends at Höchstadt. Capacity is being trimmed in Haguenau and Toulouse, France, plus Skalica and Kysuce in Slovakia.

Add in earlier programs and 1,800 signed partial-retirement deals, and roughly 18% of Schaeffler's German core workforce disappears by 2028. The company expects that to add around 300 million euros ($336 million) a year to earnings starting in 2030. The bet: strip out overcapacity and pile on efficiencies while combustion engine demand sags and EV adoption crawls in slower than anyone hoped. Schaeffler is still losing money on EVs.

The numbers behind the pain are grim. Third-quarter revenue slipped 0.2% year on year to 5.8 billion euros, and earnings before interest and taxes before special items dropped 7.2% to 245 million euros. Schaeffler blamed above-average costs per employee in Germany and too many management layers. The cuts lean hard on R&D, which accounts for 30% of the fresh reductions, versus 50% in production and 20% elsewhere.

Germany's autos slump is industry-wide. New car registrations in the European Union have fallen from 15.3 million units in 2019 to 10.8 million in 2025, and Volkswagen is mid-overhaul with around 100,000 job cuts and multiple plant closures as Chinese brands squeeze profitability. Rico Luman, senior sector economist at ING, told CNBC the German industry is in an unprecedented transition that can't be stopped. Battery electric vehicles hit 22.7% of EU new registrations in the 12 months to September, but Chinese brands are gaining ground there, and suppliers are feeling it worst, Luman said. EVs take fewer parts to build, and Europe still can't compete on battery costs.

The R&D reduction caught Luman off guard. He told CNBC it surprises him a bit, given how much effort developing new products and markets requires. CEO Klaus Rosenfeld's answer: play defense and offense at once. He told CNBC's Squawk Box Europe that Schaeffler wants to keep producing in Germany and prove it's possible, but only by confronting the auto downturn, plant overcapacity, too much R&D capacity, high personnel costs and a bloated organization. The company is freeing up capacity for new bets.

Those bets are robotics and defense. Schaeffler set up a defense subsidiary at the end of 2025 and named a CEO of Defence & New Space in June, chasing Europe's military spending surge and tight regional production capacity. Rosenfeld also sees ample room for efficiency gains through robotics, automation and AI.