Top German auto parts supplier Schaeffler, whose customers include major European car brands, announced Tuesday that it planned to cut almost 3,500 jobs and close five sites in Europe as the crisis gripping the region's car industry deepens.
Like other German carmakers and suppliers, the group has struggled with competition for its key products, which include ball bearings and electric vehicle parts, especially from Chinese manufacturers.
Three-quarters of the 3,460 job cuts and four of the five site closures will be in Germany, the company said in a statement, pointing to "above-average" labor costs in Europe's top economy.
The cuts, to be completed by 2028, are about 3% of the group's global workforce of almost 110,000, and should result in annual savings of about 300 million euros ($336 million) from 2030, it said.
Schaeffler said in a statement that it was "responding to the persistently challenging environment in the automotive industry."
The company cited "an overall downturn in the market and intensifying competition ... characterized by weakened demand for internal combustion engine vehicles and a delayed ramp-up of electric mobility," it added.
The cuts would mainly focus on production and research and development.
The sites set for closure are in Berlin, Dortmund and two other towns in western Germany. A small site in Belgium will also be shuttered.
There will also be job cuts at sites in France and Slovakia.
Schaeffler said some of the job losses would be offset by the creation of positions in "future-oriented fields," such as humanoid robotics and defense.
While not as well known as the car titans they work with, such as Volkswagen, BMW and Mercedes-Benz, the German supplier is a crucial part of the auto ecosystem, providing everything from braking systems to in-car electronics.
But as automakers have fallen into crisis, battling Chinese competition, high production costs at home and weakening demand, suppliers have been hit hard.
Volkswagen is planning to cut about 120,000 jobs across its brands by 2030.
German industrial giant Bosch, the world's largest supplier of car equipment, announced 13,000 job cuts last year, mostly in its auto division.
