ZF Friedrichshafen AG is realigning its structures to increase its competitiveness and respond to the changes in the mobility sector, particularly in the field of electromobility.

In line with the strategic guiding principle of “Strengthening strengths,” the company will further increase its investments in its Commercial Vehicle Technology, Chassis Solutions, Industrial Technology and Aftermarket divisions.

In the future, its German locations are to be organized more efficiently and merged into several site networks. ZF assumes that the number of employees in Germany will be gradually reduced by around 11,000 to as many as 14,000 by the end of 2028 from the current level of around 54,000.

Due to strong competition, cost pressure and weak demand for electric vehicles, the restructuring will focus on the Electrified Powertrain Technologies division.

ZF will adjust its capacities to the expected continued weaker market demand. One focus of the strategic realignment is on the Electrified Powertrain Technology division. The global market segment for passenger car drives is highly competitive and subject to strong cost pressure. This makes it difficult to cross-finance purely electric drives, which often still have low margins, with drives for conventional and hybrid vehicles, ZF said.

The shift towards electromobility will also lead to a decline in the volume of transmissions for conventional and hybrid vehicles, and this development must also be taken into account in this context. Another consideration is the current glaring weakness in demand for purely electric vehicles, which is leading to overcapacity in the electric-powertrain production lines that have been set up with high investments.

In view of these factors, ZF will review and improve the workflows, processes and structures in the Electrified Powertrain Technology division with a particular focus.

Despite 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.

—ZF CEO Dr. Holger Klein

However, the changed market perspective and high competition for electrified powertrain technologies also require openness to cooperation as well as strong partnerships, ZF said.