German car parts manufacturer ZF to cut up to 14,000 jobs in Germany amid struggles with electric vehicle transition and foreign competition

The automotive industry is undergoing a major transformation as the demand for electric vehicles continues to rise. German car parts manufacturer ZF is the latest company to announce significant job cuts in response to the shift towards electromobility and increased competition from foreign manufacturers, particularly from China.

In a statement released on Friday, ZF revealed its plans to reduce its workforce in Germany by 11,000 to 14,000 employees by 2028, representing a quarter of its current workforce in the country. The decision was described as “difficult but necessary” by ZF’s CEO, Holger Klein, who emphasized the need to adapt to the changing market dynamics and strengthen the company’s competitiveness.

The restructuring efforts will primarily focus on ZF’s electric motors division, as the demand for transmissions for conventional and hybrid vehicles has declined. The company highlighted the challenges of operating in a highly competitive market with low margins for electric vehicle components, which has put pressure on its financial performance.

Despite the challenges, ZF remains committed to investing in electromobility and exploring partnerships with other firms to remain competitive. The company plans to increase its investments in areas such as in-car technology, vehicle chassis, industrial tech, and aftermarket services as part of its restructuring efforts.

The shift towards electric vehicles is not only impacting ZF but also other European suppliers in the industry. With the European Union planning to ban the sale of new fossil fuel-powered cars by 2035, the pressure on traditional automotive suppliers is expected to increase. Chinese manufacturers, such as CATL, have already established themselves as key players in the electric vehicle market, further intensifying competition for European companies.

ZF’s decision to downsize its workforce reflects the broader challenges facing the automotive industry as it navigates the transition to electromobility and adapts to a rapidly changing market landscape. The company’s strategic restructuring efforts aim to position it as a leading supplier in the evolving automotive sector, despite the current challenges it faces.