Automotive supplier ZKW cuts 600 jobs in Wieselburg

The step is planned according to information from Thursday to the end of 2024. The majority of those affected are temporary workers whose contracts will not be extended.

In the permanent workforce, the job cuts should “not only take place in the course of employer resignations, but also through natural departures (such as retirement), employee resignations without filling the affected positions and alternative working time models such as partial retirement,” was emphasized in a press release. A voluntary social plan is offered to the permanent employees affected. The works council had already been informed by the management, the social plan negotiations would be started immediately.

As the largest employer in the region, ZKW has analyzed the situation in detail over the past few months and “came to the conclusion that these job cuts are absolutely necessary in order to restore the competitiveness of the production site in Wieselburg and to ensure the continuation of production,” emphasized Andreas Nix, Site Manager of ZKW Lichtsysteme GmbH.

The automotive supply industry in Western Europe is struggling with several structural challenges such as higher price pressure in the entire industry, increasing deindustrialization in Western Europe and high wage costs, a press release emphasized. “The problem is exacerbated and accelerated by the enormous energy costs, high inflation, increases in material costs and fragile global supply chains, among other things.”

The supplier stated that ZKW had proactively expanded its presence from Austria to the global markets. The plant in Wieselburg plays “an important role” as one of the core production sites on the European market. It was emphasized that “the necessary personnel adjustments should be implemented as socially acceptable as possible”.

ZKW’s plan to downsize the production plant in Wieselburg is “a strategic step to make it a hub for state-of-the-art products for premium brands”. The company strives to achieve its vision of profitable and sustainable growth through a strategy of concentration and focus.

“We have put together a future-oriented package of measures that will contribute to improving the company’s results in the short term and to maintaining ZKW’s innovative strength in the long term,” CEO Wilhelm Steger was quoted as saying. “We regret the consequences associated with the cost savings” for the employees.

It was also announced on Thursday that ZKW would be expanding capacities in China and Mexico “as part of its concept for sustainable growth,” “to meet the need for local production for major customers. The company will also be expanding its capacities in Slovakia,” to supply regional customers with inexpensive products”. A continuous hiring plan has been drawn up for the three countries, which should be completed by the end of 2024.

The ZKW Group is a specialist in innovative premium lighting systems and electronics. According to the company, the top products include high-performance and cost-efficient complete LED systems. The ZKW Group has twelve locations worldwide that are networked in the areas of development and production. In 2022, the group employed around 10,000 people and generated total sales of around EUR 1.36 billion.

“ZKW is one of the largest leading companies in the country. This job cut is therefore a heavy blow for the employees affected and also dramatic news for the entire business location,” reacted the state councilors Jochen Danninger and Martin Eichtinger (both ÖVP). An appeal has already been made to the management to conclude a fair social plan together with the works council.