Automotive suppliers are losing more jobs than large manufacturers, and new investments are shifting towards electric vehicles.
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The restructuring of the European automotive industry is most strongly affecting component suppliers, whose layoffs are likely underestimated because many companies are small and medium-sized enterprises. Germany is concentrating the largest reductions, while over half of the major staff expansions announced at the beginning of 2026 have been linked to Chinese investments in electric vehicles and their components.
Component suppliers bear a larger share of job losses in the European automotive industry than large vehicle manufacturers, although their layoffs are less visible and do not fully appear in large-scale restructuring statistics. An analysis by Eurofound shows that the industry is undergoing a structural reallocation of production and labor, in which activities related to internal combustion engines are shrinking, while new hires are selectively concentrated in electric vehicles, batteries, and associated components.
In short
Automakers have announced approximately 53,000 net job losses in the EU in 2024, including Volkswagen's agreement to eliminate over 35,000 positions in Germany by 2030.
Suppliers have announced more job losses than manufacturers throughout most of the period from 2022 to the first half of 2026, and the actual impact is likely greater as small and medium-sized enterprises' minor restructurings are not fully captured.
Germany concentrated over three-quarters of the net reductions associated with major automotive restructurings in 2024 and about two-thirds in 2025, with over 70,000 positions lost in 2024 and over 40,000 in the following year.
More than half of the major staff expansions in the early months of 2026 were driven by Chinese investors or companies related to electric vehicle production and their component supply.
Indicators regarding hiring expectations have weakened again, and Eurofound believes that the sector is undergoing a long-term industrial transformation, not a temporary decline followed by a complete recovery.
The European automotive industry is reorganizing factories, technologies, and supplier relationships under the pressure of global competition and the costs of technological and climate transition. The change affects manufacturers, suppliers, and regions where traditional activities are concentrated differently.
Eurofound's analysis combines two categories of information. The European Restructuring Monitor tracks announcements affecting at least 100 employees or 10% of the workforce of companies with over 250 workers. The European Commission's survey of companies separately measures expectations regarding employment developments in the next three months.
Restructuring data shows a strong deterioration starting in 2024. Job losses were limited in 2022 and moderate in 2023, before the reductions announced by large companies began to rise rapidly.
Automakers recorded approximately 53,000 net job losses in the EU in 2024. The largest individual decision was the agreement announced by Volkswagen in December 2024, after negotiations and union actions, to eliminate over 35,000 positions in Germany by 2030.
The long period over which Volkswagen's reductions are scheduled affects the annual comparison. If the over 35,000 positions are distributed over the entire period until 2030, suppliers would have borne a larger contraction than manufacturers in 2024, not just in the other analyzed years.
Eurofound treats reports from the summer of 2026 regarding possible reductions of up to 100,000 employees at Volkswagen globally as information that has appeared in the press, not as a confirmed layoff program in the analyzed company documents. The figure should not be confused with the already announced agreement for the over 35,000 positions in Germany.
The reduction of the workforce extends beyond well-known automotive brands. Suppliers have announced more layoffs than manufacturers for most of the period from 2022 to the first half of 2026.
The impact on them is likely underestimated. The Eurofound Monitor tracks large restructurings, while many suppliers are small and medium-sized enterprises whose reductions do not reach the necessary thresholds for registration.
A large manufacturer can announce thousands of layoffs in a single decision, attracting political and media attention. The loss of the same number of positions at dozens or hundreds of smaller suppliers may remain fragmented and less visible.
Affected suppliers do not form a uniform category. The first group consists of companies specialized in components for internal combustion engines, such as pistons and other parts of conventional propulsion systems.
For these companies, the issue is not only the temporary decline in orders. The structural reduction in demand for internal combustion engine components may mean that some of the existing capacities and skills no longer align with the technological direction of the industry.
Eurofound mentions in this category the closure of component factories of the Mahle company in Spain and Germany, affecting 743 jobs, and Deutz's decision to halt new research and development activities for internal combustion engines, affecting 200 jobs in Germany.
Schaeffler announced a reduction of 800 jobs in Romania, in a process related both to the decline of conventional technologies and to the relocation of part of production to Asia.
The second group includes general component manufacturers dependent on the volumes and decisions of large manufacturers. When a brand reduces production, closes a factory, or moves a model, the effect transmits to companies that manufacture seats, wiring, body elements, and other components.
In Portugal, Vanpro announced 475 job losses in an activity dependent on a single client, the Autoeuropa factory. In Germany, PSW reduced 450 positions in the context of declining demand from Audi.
The closure of the Audi factory in Brussels is indicated as an example of how a manufacturer's decision can transmit throughout the entire supply chain. The effects on upstream companies and local services can exceed the number of employees who worked directly in the plant.
The third group includes manufacturers of standardized components and labor-intensive activities. These are exposed to competition through costs and can be moved to locations where wages, energy, or other expenses are lower.
Lear announced the elimination of 960 positions in Poland by relocating production to Tunisia. MA France reduced 250 jobs, while part of the production was transferred to Turkey.
SE Bordnetze announced 950 job losses in Bulgaria, in the context of relocating production to Moldova and Romania. These transfers show that restructuring does not always mean the disappearance of activity from Europe, but also its redistribution between states and to neighboring countries.
Some companies are trying to transfer activity to electric mobility, electronics, and other components with increasing demand. However, the transition does not fully compensate for the losses from traditional technologies.
The production associated with electric vehicles is often more capital-intensive and may require fewer workers for the same volume of activity. It also requires different skills, which companies and employees specialized in conventional mechanical technologies do not automatically possess.
A component factory for engines cannot become a battery, power electronics, or advanced materials unit without investment and reorganization. Equipment, processes, quality standards, and professional qualifications are different.
The transformation thus redistributes employment between technologies, companies, and territories. Regions dependent on engines, transmissions, and traditional suppliers may lose activity, while new investments concentrate in other industrial clusters.
Germany is at the center of the restructuring wave. In 2024, the country concentrated over three-quarters of the net losses associated with major announcements in the European automotive industry.
Restructuring announcements produced over 70,000 net losses in Germany in 2024 and over 40,000 additional reductions in 2025. In that year, German cases represented about two-thirds of the European total.
The concentration should not be interpreted solely as a national problem. Germany is the center of a production network that includes suppliers and factories from numerous member states.
A reduction in orders from German factories can affect industrial regions in northern Italy, Central and Eastern Europe, France, and Spain. Local companies produce components and equipment integrated into the models and platforms developed by German manufacturers.
A reduction in production in Germany can produce delayed effects in other countries, through renegotiation of contracts, reduced volumes, and consolidation of the number of suppliers. The impact does not always occur in the same year and is not necessarily recorded as part of the same restructuring.
In parallel with the losses in traditional centers, new jobs are emerging in new electric mobility projects. Their geographical distribution is different and increasingly depends on foreign investments.
In the early months of 2026, over half of the major staff expansions recorded were generated by Chinese companies or investments related to electric vehicle production and their component supply.
Chinese companies are also building physical production capacities in Europe to directly serve the European market. Investments cover vehicle assembly, metal components, battery materials, and battery cells.
The Hispano-Chinese manufacturer Ebro is expanding its industrial capacity in Barcelona through an assembly line for the S400 and S700 models. The project is associated with several hundred new hires in 2026.
Halms, a subsidiary of the Chinese supplier Zhejiang Huashuo Technology, is building a 200 million euro production base in Hungary for aluminum cast parts intended for companies like Volvo and Tesla.
Hunan Yuneng is building its first European factory for cathode materials in Spain, one of the essential components of batteries for electric vehicles.
The Hungarian subsidiary of the Chinese battery manufacturer Eve Energy is set to start production in 2027 in a new factory in Debrecen. The investment is part of the rapid development of the battery ecosystem in Hungary.
A significant part of the expansion is concentrated in Spain and Eastern Europe. Germany has also attracted foreign projects, but in a smaller number, including the expansion of the American manufacturer Tesla and the investment of Opes Solar Mobility in solar modules for the automotive industry.
New investments do not automatically compensate for the losses in traditional regions and companies. Jobs may arise in other countries, may require different qualifications, and may be fewer than those eliminated in existing production.
A person laid off by a supplier in Germany, Belgium, or France cannot automatically take a position in a battery factory in Hungary or Spain. Geographical mobility, language, training, and differences between occupations limit the direct transfer of the workforce.
Indicators regarding companies' expectations confirm the fragility of the sector. The Commission's survey measures the difference between the proportion of firms expecting to increase their number of employees in the next three months and that of companies anticipating reductions.
The series available since 2000 shows strong declines in expectations during crisis periods, followed by slow and incomplete recoveries. After a recent deterioration, companies remain cautious regarding labor demand.
Restructuring announcements describe decisions already made or prepared, while the survey measures short-term anticipations. The weakening of both indicators suggests that the sector has not entered a stable recovery of employment.
Eurofound believes that the current process exceeds a cyclical decline. Losses are concentrated in existing production systems, supply networks, and mature automotive regions, while new jobs appear selectively in activities related to electric vehicles and batteries.
This reallocation creates the risk of a transition in which some territories attract capital and projects, while others simultaneously lose factories, suppliers, and the local base of competencies.
Attracting new investments is only one of the challenges for authorities. Policies must take into account the localization of losses, retraining of employees, and support for regions dependent on contracting activities.
Training measures must be adapted to the skills required in new activities, without assuming that any industrial qualification can be transferred quickly. Restructuring may require support for mobility, site conversion, and diversification of the local economy.
Small suppliers need distinct attention, as they have fewer resources for research, investment, and process transformation. Dependence on a single client or a single technology can amplify the risk of losing the entire activity.
Eurofound is the European Union agency for improving living and working conditions. The analysis was published on July 22, 2026, and uses data from the European Restructuring Monitor and the European Commission's surveys on business confidence.
The Monitor records large-scale restructuring announcements and does not represent the complete statistics of all jobs lost or created. Reductions in small firms, individual departures, and positions eliminated without a sufficiently large collective announcement may remain outside the data.
Companies' expectations do not represent already realized or laid-off jobs. They indicate the anticipated direction for the next three months and can change depending on demand, costs, investments, and economic conditions.
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