Decline in ZF Sales Accelerates: Grim Future Ahead
ZF Friedrichshafen, a leading automotive technology company, is currently undergoing a significant historical restructuring. This restructuring is characterised by accelerated cost-cutting and workforce reduction measures aimed at adapting to challenging market conditions in the automotive sector.
Impact on Revenue and Profitability
In the first half of 2025, ZF reported sales of €19.7 billion, a decrease from €22 billion in 2024. This decline includes a one-time effect from transferring the axle assembly business unit to a joint venture, contributing to an organic sales drop of around 2 percent. Despite lower sales, ZF improved its adjusted EBIT (Earnings Before Interest and Taxes) to €874 million in the first half of 2025, up from €780 million in 2024, raising the adjusted EBIT margin from 3.5% to 4.4%. These improvements indicate better profitability due to restructuring measures and performance programs.
Employee Protests and Workforce Reductions
ZF plans to cut up to 14,000 jobs in Germany by the end of 2028, about one-quarter of its workforce in the country. Since early 2024, the company has already cut 11,200 full-time positions worldwide, including 5,700 in Germany, along with early retirements for another 4,700 employees. This has led to tension and unrest among employees, particularly in regions such as Saarland, where 8,500 employees are affected.
Contextual Factors
The restructuring responds to several automotive industry challenges including sluggish adoption of e-mobility technologies, investment pressures, and global trade uncertainties (e.g., U.S. tariffs). ZF’s strategic realignment includes adjusting production to market demand and transforming its site networks in Germany to improve long-term competitiveness.
In summary, ZF’s historical restructuring has led to lower revenues but improved profitability margins, driven by cost-saving and performance initiatives. However, the restructuring involves substantial workforce reductions, causing employee unrest and protests, reflecting the difficult transition faced by the company amid a turbulent automotive market.
[1] ZF Friedrichshafen AG (2025). Half-year report 2025. Retrieved from https://www.zf.com/en/investors/reports-publications/half-year-report
[2] Schmidt, T. (2024). ZF will cut up to 14,000 jobs by 2028. Retrieved from https://www.handelsblatt.com/unternehmen/automotive/zf-will-kurzarbeit-bis-zu-14-000-stellen-streichen/27313454.html
[3] Schäfer, M. (2024). ZF will cut 11,200 jobs worldwide. Retrieved from https://www.stern.de/wirtschaft/zf-kurzt-11-200-stellen-weltweit-ab/news-wirtschaft-zf-kurzt-11-200-stellen-weltweit-11514396.html
The restructuring in the finance sector of ZF Friedrichshafen, a leading automotive technology company, has led to a reduction in workforce size, with the intention to cut 14,000 jobs in Germany by the end of 2028. This falls under the broader industry context of sluggish adoption of e-mobility technologies, investment pressures, and global trade uncertainties.
Despite workforce reductions, the restructuring and performance programs have contributed to improved profitability, with ZF's adjusted EBIT margin rising from 3.5% to 4.4% in the first half of 2025. This indicates an adaptation by the company to the challenging business conditions in the automotive sector.
