ZF Friedrichshafen Restructures Amid German Auto Sector Turmoil

ZF Friedrichshafen plans to cut around a quarter of its workforce in the electrified powertrain technology unit by 2030. This restructuring is part of a broader initiative to cut up to 14,000 jobs in Germany due to weak electric vehicle demand. The agreement includes early retirement and severance packages.

ZF Friedrichshafen announced it will reduce its workforce by approximately 7,600 positions in its electrified powertrain technology division by 2030. The German auto supplier reached a deal with its works council and IG Metall union as part of a restructuring plan, spurred by sluggish electric vehicle demand and trade tensions.

The company aims to slash costs by over 500 million euros by 2027. Measures include shorter working hours, deferred wage hikes, and voluntary retirement options. Despite previous plans to spin off the powertrain unit, ZF will retain the business internally under new CEO Mathias Miedreich, who envisions 'new ways' for the industry amid workforce reductions.

Months of labor protests preceded the agreement, reflecting challenges for German auto suppliers. While keen on preserving 'Made in Germany' tech confidence, ZF's measures align with sector-wide job cuts, including Bosch's recent announcement. With 55,000 auto jobs lost since 2023 identified by VDA, the company promises worker support, retraining, and fair conditions.

(With inputs from agencies.)