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Schaeffler axes 1,300 jobs as auto industry goes electric

By Tristan Chabba

(Reuters) -German automotive supplier Schaeffler plans to cut 1,300 jobs, or 1.6% of its global workforce, as the sector grapples with the shift from combustion engines to electric vehicles.

The company said the switch to electric cars was leading to overcapacity in products for combustion-engine vehicles, and automakers were continuing to cut back on development programmes for combustion engine cars.

"This step is necessary to align the company for the future," Chief Executive Klaus Rosenfeld said.

Schaeffler shares jumped nearly 10% on news of the labour cost savings and on a 27% year-on-year rise in third-quarter revenue to 4.24 billion euros. Shares in the company, which maintained its full-year guidance, were at the top of Germany's small caps index by 0921 GMT, although they were still down 17.6% this year.

Around three quarters of the job cuts will affect positions in administration and central functions in research and development for internal combustion engines, with the rest in production, Schaeffler said.

The restructuring will save around 100 million euros ($99.92 million) a year. It will require expenditure of about 130 million euros, the majority of which will be recognised as provisions in the fourth quarter, the Bavaria-based company said.

Auto suppliers have struggled to shoulder the higher costs of making their components sustainable to meet carmakers' environmental targets, on top of rampant inflation and energy prices.

($1 = 1.0008 euros)

(Reporting by Tristan Chabba in Gdansk; Editing by Maria Sheahan, Rachel More and Susan Fenton)