Global giants can't stand it either.

According to the latest news, German auto parts giant ZF Group recently announced that it expects to reduce up to 14,000 jobs in Germany by the end of 2028, accounting for about a quarter of its total German employees. The layoff plan aims to reduce costs, improve competitiveness, and free up resources for the company's future development in the field of electrification.

As the global automotive industry accelerates its transition to electrification, the traditional internal combustion engine vehicle market has shrunk sharply, which has brought unprecedented challenges to traditional European parts suppliers such as ZF Group. Many multinational parts suppliers have announced that they will lay off employees worldwide. According to data recently released by consulting firm Falkensteg, the German auto parts industry has even seen a "bankruptcy wave".

The accelerated reconstruction of the global auto parts supply chain has already begun. Chinese new energy auto parts companies are taking advantage of their competitive advantages in manufacturing and cost to start a wave of overseas factory construction. Guotai Junan Securities said in its latest research report that the electric transformation is accelerating, the domestic supply chain is expected to take advantage of the momentum, and domestic new energy vehicle parts suppliers are expected to enter the Stellantis global supply system and grow rapidly, maintaining the industry's "overweight" rating.

Sudden announcement of layoffs

On July 30, German auto parts giant ZF Group (ZF) recently announced that it expects to reduce up to 14,000 jobs in Germany by the end of 2028, accounting for about a quarter of its total German employees.

According to official news from ZF Group, the layoff plan aims to reduce costs, enhance competitiveness, and free up resources for the company's future development in the field of electrification. The layoff plan will mainly affect the production and R&D departments, and the company will integrate bases and streamline management personnel.

ZF Group CEO Holger Klein said that although it was not easy to make this decision, it was a key step to ensure that the company remained competitive in an increasingly competitive market.

Klein further stated that electric vehicles are the future development direction of the global auto parts industry, and ZF Group will increase investment in this field and establish partnerships with other companies. At present, ZF Group has made significant progress in the research and development of electric drive systems, battery management systems and autonomous driving technology. Its product line includes various motors, hybrid and pure electric transmission systems, providing automakers with a variety of options.

According to data, ZF Group was founded in 1915. As one of the world's largest automotive parts suppliers, it is well-known for the production of gearboxes, chassis systems and safety technologies. The group has about 169,000 employees worldwide, including about 54,000 employees in Germany. It has operations in more than 160 production bases in 31 countries around the world, and its turnover in 2023 will reach 46.6 billion euros (about 370 billion yuan).

As the global automotive industry accelerates its transformation to electrification, the traditional internal combustion engine vehicle market has shrunk sharply, which has brought unprecedented challenges to traditional European parts suppliers such as ZF.

In fact, ZF Group's layoff plan is not an isolated case in the industry. Other traditional automotive parts suppliers such as Freya Group, Continental Group, and Bosch have also announced layoff plans. Among them, Bosch plans to lay off 1,200 employees by 2026, including 950 in Germany.

According to data recently released by consulting firm Falkensteg, the German auto parts industry has even seen a "bankruptcy wave". In the first half of 2024, about 20 German auto parts companies with annual turnover exceeding 10 million euros filed for bankruptcy, a 60% increase from the same period last year.

Faced with this dangerous situation, ZF Group is seeking electrification transformation. In the first half of this year, ZF Group launched a strict cost-cutting plan to reduce high debts and prepare for the transition to electric vehicles after 2026, and plans to invest billions of dollars in the transformation process.