Frankfurt (Germany) (AFP) - German auto parts supplier Schaeffler said Tuesday that it planned to cut almost 3,500 jobs and close five sites in Europe as the crisis gripping the car industry deepens.

Like other German carmakers and suppliers, the group has struggled with competition for its products, which include ball bearings and electric vehicle parts, especially from Chinese manufacturers.

Three-fourths 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” costs for workers in Europe’s top economy.

The cuts, to be completed by 2028, are around three percent of the group’s global workforce of almost 110,000. They should result in annual savings of around 300 million euros ($336 million) from 2030, it said.

They come on top of 4,700 job cuts that Schaeffler had announced in 2024.

Schaeffler, in a statement, said it was “responding to the persistently challenging environment in the automotive industry.”

There was “an overall downturn in the market and intensifying competition… characterised by weakened demand for internal combustion engine vehicles and a delayed ramp-up of electric mobility”, it added.

The cuts would be mainly focused on production and research and development.

Sites would be closed in Berlin, Dortmund, and two other towns in western Germany. A small site in Belgium will also be shuttered alongside job losses in France and Slovakia.

Senior executives would take a temporary pay cut as part of a “solidarity contribution” aiming to bring costs down at all levels, the firm said.

Schaeffler shares fell a little over two percent in Frankfurt after it reported core profit of 245 million euros for the third quarter, down 7.2 percent on the same time last year.

- Rising job cuts -

Some of the job losses would be offset by the creation of positions in “future-oriented fields”, such as humanoid robotics and defence.

Schaeffler’s works council, which represents employees, called for talks with management, saying that cuts alone could not restore the company to health.

“The programme presented here lacks precisely the creativity we need in the face of the crisis,” council head Uli Schoepplein said.

“We expect a clear, forward-looking and proactive vision: Which business areas does Schaeffler want to develop? Which products and technologies will be made in Germany in the future?”

While not as well known as the car titans they work with, such as Volkswagen, BMW and Mercedes, Germany’s suppliers are a crucial part of the auto ecosystem, providing everything from braking systems to in-car electronics.

But as their customers have fallen into crisis, battling Chinese competition, high production costs at home and weakening demand, suppliers have been hit hard.

Volkswagen recently announced plans to cut an additional 50,000 jobs across its brands by 2030, bringing total planned reductions to 120,000.

German industrial titan Bosch, the world’s biggest supplier of car equipment, announced last year 13,000 job cuts, mostly in its auto division.