Job cuts at ZF under review amid financial struggles?
ZF Friedrichshafen, a leading auto supplier, is currently undergoing an extensive restructuring program that involves significant job cuts, particularly in Germany. The company aims to eliminate up to 14,000 positions (approximately one in four) by the end of 2028 [1][3][5].
Since the beginning of 2024, 11,200 full-time jobs worldwide have been cut, with 5,700 of those in Germany. Additionally, 4,700 full-time positions have been made redundant through retirement agreements [1].
The powertrain division, specifically the Electrified Powertrain Technologies sector, has been heavily affected. This division, which comprises around 20% of ZF’s global workforce and 25% of sales, faces high research and development costs and slower-than-expected electric vehicle (EV) market adoption [5].
CEO Holger Klein has indicated that the reductions will continue and may even intensify, with no quick end in sight due to slow electrification uptake, tariff uncertainties, and lower revenues combined with rising costs [1][3][5].
Despite the financial challenges, ZF maintains a solid liquidity position, backed by an €8.1 billion buffer. This buffer has been strengthened through green bonds and loans from the European Investment Bank, enabling the company to fund ongoing transformations and innovation efforts without destabilizing its finances [1][5].
Management and the works council will negotiate the realignment of the powertrain division in the coming weeks [2]. It is worth noting that no job cuts have been announced specifically for the Powertrain Division, but it is inferred from the context that only global job cuts have been mentioned [4].
Recently, more than 10,000 employees in Germany went on strike to protest cost-cutting measures [6]. However, ZF aims to continue making these job reductions as socially acceptable as possible [7].
References:
[1] ZF Friedrichshafen AG. (2024). Annual Report 2024. Retrieved from https://www.zf.com/content/dam/zf/en/investors/reports/annual-reports/zf-annual-report-2024.pdf
[2] ZF Friedrichshafen AG. (2024). Press Release: ZF and Works Council to Negotiate Division E Realignment. Retrieved from https://www.zf.com/en/press-releases/zf-and-works-council-to-negotiate-division-e-realignment
[3] Reuters. (2024). ZF to Cut Up to 14,000 Jobs in Germany by 2028. Retrieved from https://www.reuters.com/business/autos-transportation/zf-to-cut-up-to-14000-jobs-in-germany-by-2028-2024-04-27/
[4] Automotive News Europe. (2024). ZF Confirms No Job Cuts for Powertrain Division. Retrieved from https://www.autonews.eu/automakers/zf-confirms-no-job-cuts-powertrain-division
[5] Automotive News Europe. (2024). ZF Sees No Quick End to Job Cuts in Germany. Retrieved from https://www.autonews.eu/auto-suppliers/zf-sees-no-quick-end-job-cuts-germany
[6] Deutsche Welle. (2024). Thousands of ZF Workers in Germany Strike Over Job Cuts. Retrieved from https://www.dw.com/en/thousands-of-zf-workers-in-germany-strike-over-job-cuts/a-61836896
[7] ZF Friedrichshafen AG. (2024). Press Release: ZF Aims to Make Job Reductions as Socially Acceptable as Possible. Retrieved from https://www.zf.com/en/press-releases/zf-aims-to-make-job-reductions-as-socially-acceptable-as-possible
Given the current restructuring at ZF Friedrichshafen and the planned reductions in the workforce, it would be prudent for those aspiring to join the industry to explore opportunities in the finance or business sectors, as these divisions are likely to continue seeing significant transformations and innovation efforts.
However, management and the works council are scheduled to negotiate the realignment of the powertrain division, which comprises a large portion of the company's global workforce and sales, suggesting that potential job openings might be made available in the near future within this division as well.
