Schaeffler is set to trim its European workforce, impacting 4,700 employees. Germany will see the maximum cuts, with about 2,800 layoffs across ten plants. The remaining cuts will happen at five other plants that have not been officially revealed. Displacements will take away about a thousand jobs.

Why are these cuts happening? Well, for one the European auto segment is reeling under high production costs and the increasing demand for electric vehicles. The operating profits of the company that manufactures machine and car parts came down by 50 per cent in Q3. Schaeffler is now reportedly endeavouring to save about 290 million euros ($315.4 million) annually over the next five years, by putting in place efficiency measures that will cost about 580 million euros. Not only has the automotive market been lukewarm, Schaeffler has also suffered dipping sales in its industrial business that manufactures industrial robots and components for wind turbines. The demand has been especially low in the wind energy market thanks to the stiff competition from China.

Meanwhile, Schaeffler plans to sell Melior Motion, its industrial robotics plant because the demand for factory robots has fallen drastically. It also plans to relocate operations of the Ewellix plant to Schweinfurt, and shut down the Ewellix’s Taiwan factory. Considering that Schaeffler had acquired the Melior Motion and Ewellix plants barely two years ago, the company appears to be desperate to improve its financial standing.

Ulrich Schoepplein, head of the works council, Schaeffler, has reportedly requested the executive board to meet with employee representatives and discuss alternatives to save jobs in long run.