Thyssenkrupp Cuts Engineering Jobs in Auto Unit While Steel Arm Chases Double-Digit Margins

Thyssenkrupp Automotive Technology plans 160-180 job cuts in Essen and Ennepetal as Steel Europe targets at least EUR 1.2 billion adjusted EBITDA.

Thyssenkrupp is pressing ahead with a two-front restructuring, pairing a fresh round of job cuts in its automotive supply business with an ambitious profitability push at its steel division. The Essen-based conglomerate confirmed that Thyssenkrupp Automotive Technology will shed between 160 and 180 positions across its Essen and Ennepetal sites as part of a reorganization of the chassis operations.

The reductions fall chiefly on development, engineering, quality management and operational control, according to Dow Jones and Reuters, while shock-absorber production in Ennepetal is to continue unchanged. Talks with labor representatives over a social plan are ongoing, and the overhaul is scheduled to take effect on January 1, 2027.

That the axe lands on engineering rather than the shop floor says much about the pressures bearing down on Germany's auto suppliers. Rising development costs and the industry's technology shift are forcing vendors toward leaner processes and tighter structures. For Thyssenkrupp, the goal is to shield its supply arm from the headwinds buffeting the car sector instead of tying up capacity inefficiently.

Steel Unit Sets Its Sights Higher

The larger question for the group's future lies with Steel Europe, whose carve-out remains the overarching pivot of the entire corporate strategy. At the division's capital markets day earlier this week, management laid out medium-term targets of at least EUR 1.2 billion in adjusted EBITDA, an adjusted EBITDA margin above 11 percent and positive free cash flow. For the fiscal year that ended September 30, the unit expects adjusted EBITDA of roughly EUR 400 million.

The planned independence of Steel Europe — in which Thyssenkrupp AG may retain a minority stake — is intended to free the parent from the violent swings of the steel cycle. The stock has gained 15.7 percent since the spin-off plan was reported more than a month ago.

Brussels is lending a hand. The European Union introduced provisional safeguard measures with import quotas and minimum prices for electrical steel on September 25, and Reuters reports that Thyssenkrupp Steel Europe, alongside Polish producer Stalprodukt, ranks among the beneficiaries. Since July 2026, EU quotas and tariffs have covered more than 80 percent of the European flat-steel market, easing competitive pressure from cheap non-European imports.

Product mix is shifting too. Nearly two-thirds of the current portfolio already consists of premium steels, where customers pay for specific material properties and prices hold up better. More than EUR 1 billion has flowed into the production network in recent years, and construction of the hydrogen-ready direct-reduction plant in Duisburg continues as part of the decarbonization drive.

Analysts Split on the Road Ahead

Opinion on the plans is far from uniform. Deutsche Bank Research reaffirmed a buy rating with an EUR 18 price target on September 29, crediting the steel division's new benchmarks. JPMorgan took a more cautious line on September 28, keeping its rating at "Neutral" with an EUR 15 target.

The market has so far taken the overhaul in stride. The shares closed yesterday at EUR 14.51 after a modest 0.9 percent pullback, and the stock is up 56 percent since the start of the year. In more recent trading the paper changed hands at EUR 14.55, down 0.6 percent on the day.

None of this comes without risk. The transformation is both costly and people-intensive, and management describes demand in its key markets as broadly stable while profit prospects remain strained. A workable agreement with the works councils in Essen and Ennepetal has yet to be reached, and resistance from the workforce or delays in relocating development tasks could make the intended savings more expensive. Delays to the Duisburg projects — technical or financial — would push capital requirements higher still, and any weakening in demand from key customer industries would quickly put the 11 percent margin target out of reach.

The next hard evidence arrives with the annual results, when the board must show how far the realignment of the divisions has actually progressed. Until then, the stock's support rests on faith that the EUR 1.2 billion EBITDA goal stays within reach and that the auto-unit relocations run smoothly. Should that confidence falter, or should further restructuring charges emerge, investors are likely to pocket their gains.