Schaeffler CEO says to study further restructuring needs

Schaeffler CEO says to study further restructuring needs

Schaeffler CEO Signals Ongoing Restructuring Amid Market Challenges

Schaeffler AG, the German automotive parts manufacturer, has reiterated its commitment to structural adjustments as it navigates persistent challenges in the automotive sector. CEO Klaus Rosenfeld emphasized the need for further restructuring measures during a recent earnings update, citing ongoing market pressures and the transition to electrification. The company's 2025 outlook remains cautious, with an EBIT margin forecast of 3% to 5%, reflecting subdued demand and cost pressures in Europe.

The restructuring program, announced in late 2024, includes significant job cuts and operational realignments. Schaeffler plans to reduce approximately 4,700 positions across Europe, primarily in Germany, with net job losses of 3,700 after accounting for production relocations. Affected divisions include Bearings & Industrial Solutions, Powertrain & Chassis, and E-Mobility, as the company seeks to address overcapacity and declining ICE (internal combustion engine) demand. These measures are expected to generate annual savings of €290 million by 2029, though they require upfront costs of €580 million, largely for relocations and severance.

The restructuring aligns with Schaeffler's broader strategy to integrate Vitesco Technologies, a merger completed in October 2024. Synergies from the deal, including cost reductions and purchasing efficiencies, are projected to contribute €75 million annually by 2029. However, Rosenfeld acknowledged that the transformation process remains complex, particularly as European automakers delay electrification timelines and intensify price competition.

Financial results for 2025 underscored the challenges. Despite a 3.4% decline in sales (€23.5 billion on a comparable basis), operating profit rose 11.1% to €936 million, driven by cost-cutting. However, a net loss of €424 million was reported due to restructuring charges and software system conversions. Rosenfeld stressed the importance of maintaining competitiveness through investments in e-mobility, hydrogen technologies, and emerging sectors like humanoid robotics, according to company statements.

While the company's dividend will increase to €0.30 per share in 2026, reflecting improved cash flow, analysts remain cautious about near-term profitability. Schaeffler's path to long-term growth hinges on its ability to balance cost discipline with innovation in a rapidly evolving industry.