Published by Global Banking & Finance Review®
Posted on July 31, 2025
2 min readLast updated: January 22, 2026
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ZF Friedrichshafen is ramping up restructuring efforts, considering layoffs due to a slowdown in the automotive industry and US tariffs.
(Reuters) -Germany's second-largest automotive supplier ZF Friedrichshafen said on Thursday it is intensifying its restructuring measures and no longer rules out compulsory layoffs, as it grapples with a slowdown in the car industry.
"Stagnating global vehicle production, the sluggish ramp-up of electromobility and uncertainty arising from the US tariffs mean lower sales and rising costs. We are addressing these issues and accelerating our restructuring program," chief executive Holger Klein said in a statement.
ZF, which helps automakers develop gearboxes and hybrid drivetrains, said it has cut 11,200 full-time employees since the beginning of 2024 and a further 4,700 people have signed partial retirement agreements or will enter regular retirement.
The firm reported sales of 19.7 billion euros ($22.54 billion) for the first half of 2025, down from last year's 22 billion, and an increase in its adjusted operating profit (EBIT) margin to 4.4% from 3.5% a year earlier.
Every product group is being assessed on whether it is earning its capital costs, the company said, adding this would result in adjustments to the product program.
The company is also assessing options for its Electronics and Advanced Driver Assistance Systems (ADAS) division.
"We are aware that this will yet again involve painful decisions," CEO Klein said.
($1 = 0.8740 euros)
(Reporting by Paolo Laudani in Gdansk, Editing by Rachel More)
Restructuring refers to the process of reorganizing a company's structure, operations, or finances to improve efficiency, adapt to market changes, or address financial difficulties.
A hybrid drivetrain combines an internal combustion engine with an electric motor to improve fuel efficiency and reduce emissions in vehicles.
EBIT margin is a financial metric that measures a company's earnings before interest and taxes as a percentage of its total revenue, indicating operational profitability.
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