German parts manufacturer ZF announced on Friday that it will be reducing its domestic workforce in Germany by 11,000 to 14,000 positions over the next six years.
The decision to significantly downsize its German operations, which currently employ around 54,000 people, is a necessary step for the company to adapt to the shift towards electromobility. ZF CEO Holger Klein cited strong competition, cost pressures, and weak demand for electric vehicles as primary factors behind the restructuring.
“The seriousness of the situation calls for decisive action to be able to adapt the company to the tougher market and competitive environment,” Klein stated. “Restructuring our operations in Germany is needed to strengthen our competitiveness and consolidate our position as one of the world’s leading suppliers.”
The transition away from internal combustion engines has eroded demand for ZF’s traditional transmission and driveline products. At the same time, the emerging market for electric vehicle powertrains has become “highly competitive,” particularly with the rise of Chinese manufacturers.
Despite the challenges, ZF remains committed to investing heavily in electromobility. The company plans to explore potential partnerships and collaborations to remain competitive in this rapidly evolving market.
As part of the restructuring, ZF will also be increasing its focus on in-car technology, vehicle chassis, industrial technology, and aftermarket services. The extent of the job cuts will ultimately depend on the future development of the markets, as the transition to electric vehicles is expected to result in some inevitable job losses in the industry.
