France's Freya plans to cut 10,000 jobs in Europe within five years to cope with the challenge of vehicle electrification

According to news on February 20, Forvia, a world-renowned auto parts supplier in France, recently issued an important announcement that it plans to reduce its workforce in Europe by 10,000 people in the next five years. This number accounts for 10% of its total employees. 13% of the number. This decision is aimed at optimizing the cost structure, strengthening competitive advantages, and meeting the increasing challenges of electrification transformation in the automotive industry.

Frea Group is a company formed by the merger of French parts giant Faurecia and German auto parts supplier Hella. It mainly produces automotive interiors, exhaust systems, headlights and other products. In 2023, the company achieved sales of 27.25 billion euros and successfully turned a profit, but it still faces debt problems.

It is understood that this layoff plan is regarded as a key part of Freya's "EU First" strategy, aiming to reduce the impact on the single market, especially the Chinese market. over-reliance and further optimize R&D expenditures and operating costs. Currently, the Chinese market brings about 27% of Freya's sales and most of its profits.

Forea Chief Financial Officer Olivier Duran said in an interview that the company plans to achieve the reduction target through natural attrition and reducing the recruitment of new employees, rather than directly laying off 10,000 employees. He pointed to the sluggish European market and the underutilization of some factory capacity as the main reasons for the company's decision.

In addition to Freya, other auto parts suppliers such as Continental, Bosch and ZF have also announced layoff plans. ZF even warned that it may need to lay off up to 20% of its employees in response to market difficulties.

Industry analysts believe that the growth of the electric vehicle market is lower than expected, coupled with the sluggish overall vehicle sales, making parts suppliers’ huge investments in electrification transformation facing severe market tests. Take ZF as an example. As of the end of June last year, the company's net debt had reached 11.5 billion euros, and it had to lay off about 800 people to relieve financial pressure.

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