"Due to lost sales, the group has to achieve annual labour cost savings of €250 million in Germany. If we were to reach this goal through layoffs alone, it would correspond to roughly 4,500 jobs," the company said in a statement.
Jürgen Geissinger, the head of the company added: "However, we have made it clear from the start that we want to prevent layoffs wherever possible. That is why we have focused on a number of other measures to reduce labour costs in Germany and save as many jobs as possible."
Schaeffler said its sales forecast of €7.5 billion ($10.2 billion) for this year was "significantly below 2008" and that the future was not bright for the company.
"The Schaeffler Group does not expect the markets to return to 2008 levels until 2012 or 2013," the statement said.
Schaeffler took over its much bigger counterpart Continental last year but now finds itself crushed under heavy debt contracted to carry out the deal. It announced in March it would put 20,000 employees on short-time work and the Bavarian-based company is seeking aid from the German government.