Large-scale demonstrations under ZF: Council estimates participation of over 4,000 individuals
ZF Announces Major Job Cuts and Cost-Cutting Measures Amid Financial Struggles
ZF, a leading automotive supplier, is set to release its half-year financial results on Thursday, but the company's financials show a mixed picture with some growth in sales but declines in profitability. The announced cost-cutting measures have caused significant unrest among the ZF workforce, leading to a planned workforce protest at the company's headquarters in Friedrichshafen.
Financial Challenges
For the June 2025 quarter, ZF Steering Gea’s net sales increased by about 2.38% to Rs 130.93 crore compared to June 2024, but quarterly net profit declined by approximately 17.7% to Rs 11.95 crore, and EBITDA dropped by 11.03% to Rs 24.11 crore. Another source cites a consolidated net profit decline of 21.79% to Rs 7.97 crore in the same quarter despite a 3.77% sales increase. This indicates underlying profitability pressures despite slightly higher revenues.
ZF’s broader group is dealing with declining sales and profits driven by weak automotive demand and high costs related to electric vehicle transitions. To manage financial challenges, ZF Europe Finance recently completed a substantial €1.25 billion bond issuance with a 7% yield, suggesting active efforts to stabilize liquidity and finance investments.
Employment Impacts
ZF is undergoing significant restructuring, including plans to cut up to 14,000 jobs in Germany by 2028. This reduction represents nearly 25% of its German workforce, aimed at controlling costs amid forecasted declines in global automotive production and profitability pressures. The company’s finance chief, Michael Frick, indicated readiness for further cost cuts if auto production falls more, implying potential for additional employment impacts if market conditions worsen.
The announced job cuts would significantly increase the number of jobs lost since the beginning of 2024, when 5,700 jobs have already been cut at ZF. Dismissals due to operational reasons are no longer ruled out as part of these cost-cutting measures. The job cuts and working hour reductions are not limited to the locations where protests are planned, with similar actions planned at other locations, including Saarbrücken and Schweinfurt.
Protest and Unrest
The escalation of the situation was triggered by the austerity measures implemented by ZF CEO Holger Klein. Approximately 4,000 participants are expected to attend the protest at ZF’s headquarters in Friedrichshafen, located on Lake Constance. The protest will include a march through the city center and works meetings at the headquarters. Many employees' working hours have also been reduced at ZF. The protest will involve employees from various locations, including Saarbrücken and Schweinfurt.
In summary, ZF is experiencing modest sales growth but declining profitability in mid-2025, accompanied by aggressive cost-cutting measures that include major job cuts, particularly in Germany, as part of a broader restructuring strategy aligned with challenges in the automotive market and electrification transition. The announced measures have caused significant unrest among the ZF workforce, leading to a planned workforce protest at the company’s headquarters in Friedrichshafen.
- The financial struggles at ZF, a leading supplier in the automotive industry, are impacting the health and wellness of their workforce, leading to a planned protest about workplace-wellness concerns.
- Despite a slight increase in sales, ZF's profitability has decreased, contributing to the need for science-based solutions to address the financial challenges faced by the company and the broader industry.
- The financial challenges faced by ZF have led to policy-and-legislation discussions about the need for regulatory measures to support the health-and-wellness of workers in the finance sector, including those in transportation and the automotive industry.
- The cost-cutting measures at ZF, including job cuts and reduced working hours, are being closely watched by other companies in the industry as a potential indication of broader shifts in the economy, including general-news implications for the labor market.
- The financial struggles at ZF and their resulting cost-cutting measures highlight the need for comprehensive strategies that prioritize both financial success and employee wellness, shaping the future of the industry and the broader economic landscape.
