(Reuters) - Automotive seating supplier Adient (NYSE:ADNT) plc on Monday said it was restructuring its Europe business by cutting jobs and transferring work to countries with lower labor expenses, in a bid to cut costs.
The company did not disclose how many employees were affected by the layoffs or which countries it is shifting roles to. As of September 2023, Adient had over 70,000 employees worldwide, with about 42% of them working in the Europe, Middle East and Africa (EMEA) region.
European automakers face a trifecta of challenges: soft demand due to higher borrowing costs that discourage car purchases, fierce competition from Chinese rivals, and higher input costs squeezing their margins.
Adient supplies seats to some of Europe's biggest automakers, including Stellantis (NYSE:STLA), Renault (EPA:RENA), BMW (ETR:BMWG), Mercedes Benz (ETR:MBGn) and Volkswagen (ETR:VOWG_p), as well as American giants Ford (NYSE:F) and General Motors (NYSE:GM).
The company's sales suffered in the first quarter ended Dec. 31, as the UAW strikes affected production volumes in the United States.
Adient's new round of layoffs and the rest of the restructuring would result in a charge of about $125 million in the company's fiscal second quarter. The plan would be completed by fiscal 2027, the company said, adding it expects about $60 million in reduced annual operating cost.
The company had outlined a restructuring plan earlier this year, including workforce reductions of about 13,000 employees, its first-quarter regulatory filing showed.