Job Cut Speculation Surrounds ZF Amidst Ongoing Crisis: What's Next? - Job cuts loom over ZF Corporation as management ponders potential new layoffs?
ZF Friedrichshafen Faces Nationwide Strike Amid Job Cuts and Restructuring
More than 10,000 employees of ZF Friedrichshafen went on strike nationwide on Tuesday, protesting against further cost-cutting measures. The German automotive supplier, based in Friedrichshafen, is planning to cut up to 14,000 jobs in Germany by the end of 2028.
This move would amount to about one in four positions in the country, as the company intensifies its restructuring programs to address challenges such as weak demand for electric vehicles, high investment costs, and global economic volatility.
CEO Holger Klein has announced plans to accelerate and deepen restructuring, but there are no clear official statements beyond the 14,000 figure regarding additional job cuts. However, the company has not ruled out compulsory layoffs, suggesting that further reductions could be possible depending on how the restructuring and market conditions evolve.
The future of the powertrain division, which is currently struggling and subject to possible carve-out or further restructuring, remains under review with a decision expected by September 2025.
The announced job cuts have led to significant labor unrest, with large protests occurring at ZF facilities in Germany.
In the coming weeks, management and the works council will negotiate the realignment of Division E, which covers electric, hybrid, and internal combustion engines and is particularly affected by the slow rollout of e-mobility. The division is currently not competitive in some areas.
ZF increased its adjusted earnings before interest and taxes (EBIT) to 874 million euros in the first half of the year, up from 780 million euros. However, no figures for the bottom line were provided for the first half of the year. The company is burdened by billions in debt, particularly from past acquisitions of auto supplier TRW and brake specialist Wabco.
Last year, ZF posted deep red numbers, with a loss of just over one billion euros. The slow rollout of electrification and uncertainty due to US tariffs have led to lower sales and rising costs at ZF.
Retirement contracts have been agreed for another 4,700 full-time jobs at ZF. Worldwide, about one in five ZF employees work in this division. There have been rumors about plans to sell the division or bring in a partner.
Net debt stood at around 11.5 billion euros at the end of June. ZF has cut 11,200 full-time jobs worldwide since the beginning of 2024, including 5,700 in Germany. The decline in revenue, which fell by 10.3 percent to 19.7 billion euros in the first half of the year, is due to a one-time effect, as the axle assembly division, now part of the joint venture ZF Foxconn, was still part of ZF at the time.
CEO Holger Klein announced that ZF is addressing these issues by accelerating its restructuring program. The company is not expecting a quick end to job cuts for its German employees.
- In response to the nationwide strike and mounting job cuts at ZF Friedrichshafen, there is a need for a clear community policy that addresses the concerns of employees and fosters dialogue between management and labor.
- As ZF Friedrichshafen continues to grapple with job cuts and restructuring, a comprehensive employment policy, including financial support and retraining programs, is crucial to help affected employees transition into new opportunities within the business or external industries.
