The German automotive and industrial supplier Schaeffler is feeling the economic downturn in the automotive industry: In the first quarter of 2025, revenue declines. Additionally, the company announces job cuts, primarily affecting locations in Germany and Austria.
The German automotive and industrial supplier Schaeffler felt the ongoing weakness of international automotive markets in the first quarter of 2025. As the SDAX-listed company announced on Wednesday, revenue fell by 3.5 percent on a comparable basis compared to the same period last year, amounting to 5.9 billion euros. Business performance was particularly weak in Europe and China, two of the company’s most important sales markets.
The adjusted earnings before interest and taxes (EBIT) for the period from January to March amounted to 276 million euros, slightly below the level of the previous year. As a result, Schaeffler did not meet analysts’ revenue expectations but achieved the projected target with an adjusted operating margin of 4.7 percent. The operating margin is considered a key indicator of a company’s profitability in day-to-day operations.
Vitesco integration burdens quarterly result
As part of the quarterly reporting, Schaeffler also announced that the figures from the operating business were reported on the assumption that Vitesco Technologies Group AG, a specialist for drive technologies acquired in October 2024, had already belonged to the Group for the entire previous year. This method enables a better comparison of the current business development with the previous year’s figures.
Despite the subdued business figures, CEO Klaus Rosenfeld is sticking to the annual forecast: “We confirm our forecast for the 2025 financial year.” The company continues to expect a slight recovery in the markets in the second half of the year and is relying on the synergies from the integration of Vitesco and its own transformation program.
The pressure on earnings is particularly evident in the net profit attributable to Schaeffler shareholders. This fell by almost two thirds to 83 million euros in the first quarter of 2025. This was mainly due to one-off effects resulting from the integration of Vitesco and structural adjustments.
E-mobility, hydrogen, industrial automation: Schaeffler drives transformation forward
Schaeffler is currently undergoing a far-reaching restructuring process. The company is increasingly focusing on the expansion of promising business areas such as e-mobility, hydrogen technology and industrial automation. The acquisition of Vitesco is a key strategic step towards expanding the portfolio in the field of electric drive systems and improving the company’s position in global competition.
Market observers see the current development as an indication of the challenges facing the entire supplier industry. Supply chain problems, increased raw material costs and continued weak demand in key automotive markets are weighing on the industry. In China in particular, where Schaeffler traditionally has a strong presence, the economic environment has recently deteriorated.
In the long term, Schaeffler is focusing on increasing efficiency, technological innovation and greater diversification of the business fields. The strategic objectives include strengthening the industrial business, which is proving to be more robust than the automotive-dependent segment. The focus is also on digital solutions for condition monitoring and intelligent maintenance of industrial systems.
Job cuts in Austria and Germany
As part of a comprehensive restructuring program, the automotive and industrial supplier Schaeffler is planning to cut 4,700 jobs in Europe, 2,800 of them in Germany. The aim of this measure is to secure the company’s long-term competitiveness. The job cuts will affect ten locations in Germany and five more in Europe.
In Austria, the Berndorf site in Lower Austria with around 466 employees is potentially affected. Although specific measures for this location are not yet known, it is expected that savings could also have an impact here. However, a former high-ranking manager at Schaeffler Austria said that the plant is in a good position within the Group due to its high level of automation and technical equipment and is not at risk of closure.
The restructuring, which is to be implemented by 2027, aims to save around 290 million euros annually. Some of these savings are related to the integration of drive specialist Vitesco, which Schaeffler acquired in October 2024. The merger will lead to overlaps in administration, which will also contribute to job cuts.
Schaeffler CEO Klaus Rosenfeld emphasized that the program is necessary to ensure the company’s competitiveness in a challenging market environment. He assured that the job cuts would be implemented in a socially responsible manner and with a sense of proportion.