ZF Friedrichshafen, a leading German automotive supplier, has announced a significant restructuring plan that includes reducing its workforce in Germany by up to 14,000 employees by 2028. This decision comes as the company grapples with the ongoing transition to electric vehicles and faces mounting financial pressures.
The proposed job cuts, which could affect nearly a quarter of ZF's German workforce, are aimed at streamlining operations and enhancing competitiveness in the rapidly evolving automotive landscape. The company plans to achieve these reductions through attrition, leveraging the demographic structure of its workforce, and offering early retirement options. Additionally, ZF intends to establish leaner site networks across Germany.
This move follows a strict cost-cutting program implemented by ZF earlier this year, targeting a reduction of approximately six billion euros in costs globally by the end of 2025. The company's CEO, Holger Klein, had previously indicated that maintaining the current workforce size in Germany would not be sustainable in the long term.
The primary driver behind these cost-cutting measures is ZF's substantial debt burden, largely stemming from its acquisitions of automotive supplier TRW and brake specialist Wabco. The company currently faces significant interest payments on these loans, which are hindering its ability to invest in the necessary technologies for the electric vehicle transition.
Despite the challenges, ZF remains committed to investing billions in electromobility in the coming years. However, the company acknowledges the need to balance these investments with financial prudence and operational efficiency.
The announcement of the job cuts has been met with resistance from the works council, which has vowed to fight for every job. The council argues that the planned cuts are a distraction from managerial failures and that alternative solutions should be explored.
ZF, which is majority-owned by the Zeppelin Foundation of the city of Friedrichshafen, employs approximately 169,000 people worldwide, with around 10,300 employees based at Lake Constance in Germany. The company operates more than 160 production sites in 31 countries and generated sales of around 46.6 billion euros in 2023.
