ZF Friedrichshafen will cut around a quarter of its workforce in its electrified powertrain technology unit by 2030 under a restructuring deal reached with its works council and labour union IG Metall, the German auto supplier said on Wednesday.
The move is part of a broader plan announced by ZF Group last year to eliminate up to 14,000 positions in Germany as the auto industry struggles with weak electric vehicle demand and global trade tensions. ZF also has a high debt burden from past acquisitions.
The company said the 7,600 job cuts would be accompanied by shorter working hours and a postponed wage increase to help lower costs by more than 500 million euros ($536 million) by 2027. The agreement includes early retirement options and severance packages, with a commitment to avoid forced redundancies.
POWERTRAIN TECHNOLOGY UNIT STAYS IN-HOUSE
ZF, which employs about 30,000 people in the powertrain technology division producing electric, conventional and hybrid systems, said it would keep the business in-house after abandoning plans to spin it off.
New CEO Mathias Miedreich, who took over on Wednesday following the early exit of his predecessor Holger Klein over disagreements about the division’s future, described the deal as exploring “new ways” for the industry while acknowledging the “hard cuts” for employees.
The agreement follows months of protests by ZF workers, highlighting broader challenges for German suppliers. Last week, rival Bosch announced another 13,000 job cuts, as suppliers struggle with weak auto markets and uncertainty over U.S. tariffs.
Germany’s auto sector has shed about 55,000 jobs since 2023, according to industry association VDA, with suppliers hit hardest.
CONFIDENCE IN GERMAN TECHNOLOGIES
ZF’s works council chief Achim Dietrich said the pact signalled confidence in “Made in Germany” technologies.
IG Metall’s Barbara Resch added that workers had made concessions and expected ZF to remain a “job engine” with fair conditions.
The company pledged to help employees move to new roles, including retraining opportunities.
Under the pact, weekly working hours at the unit’s German sites will be reduced by about 7% through 2027, while a planned 3.1% pay rise will be postponed from April to October 2026.