Germany – ZF Friedrichshafen AG, a mobility products and systems supplier based in Friedrichshafen, Baden-Württemberg, has announced that it plans to substantially reduce its workforce in Germany by the end of 2028, citing economic pressures and higher automation as factors which informed the decision.

Across its many German locations, ZF intends to shed between 11,000 and 14,000 employees over the next four years (from a current total of approximately 54,000) in order to cut costs and consolidate its operations. In the past decade, the group made several acquisitions, adding considerably to its industrial footprint and its workforce. Now, the group aims to slim down its business, particularly in the Electrified Powertrain Technologies division, which is negatively affected by “strong competition, cost pressure and weak demand for electric vehicles”.

Other factors which influenced the decision include the expected decline in demand for transmissions (one of ZF’s core products) and a growth in automation and digitisation on the production line. ZF expects that it will achieve its workforce reduction target largely through partial retirement offers and severance packages.

By making its business leaner and more cost effective, ZF aims to “strengthen its strengths” and free up money for further investments in its Commercial Vehicle Technology, Chassis Solutions, Industrial Technology, and Aftermarket divisions. Although its e-mobility business will be affected most by the restructure, CEO Dr Holger Klein assured that,

[d]espite the current market situation, one thing is clear – the future belongs to electromobility. We have made proactive investments here and will continue to invest heavily in this area.