The planned closure of Zalando’s Erfurt facility in Germany has triggered a fierce backlash, with former Thuringian Minister-President Bodo Ramelow (The Left party) accusing the online retail giant of “predatory capitalism”. The move, which will eliminate 2,700 jobs, is drawing criticism for its timing and perceived disregard for substantial public investment and employee efforts.
Ramelow highlighted the critical role Erfurt played in Zalando’s ascent. He asserted that the city served as the foundational launchpad for the company’s expansion across Germany and subsequently Europe. Supported by considerable state funding and strong backing from the Thuringian government, the Erfurt location was instrumental in Zalando’s initial success. He emphasized that the facility wasn’t simply another site, but the very genesis of the company’s growth.
Ramelow, who previously championed the establishment of a works council within the company, has been observing the escalating labor dispute, which culminated in strike action organized by the Verdi trade union. Just as a collective bargaining agreement was achieved in Erfurt, enabling employee mobilization, Zalando announced the closure, a move Ramelow described as a “shock” to employees.
The company’s decision to shutter operations after reportedly generating €100 million in profit by absorbing competitors is particularly contentious. Ramelow condemned the action as “brutal predatory capitalism” and urged both the state and federal governments to exert pressure on Zalando to reconsider.
Adding to the condemnation, Ines Schwerdtner, leader of The Left party, is demanding that Zalando repay the €22 million in subsidies received for establishing the Erfurt facility. She argues that these funds should be channeled into a compensation fund to support the affected employees who, she claims, have been underpaid for years. “This is a matter of respect” she stated.
Schwerdtner also proposed stringent conditions for future subsidies, requiring companies that close subsidized facilities to return the public funds. “It’s unacceptable that taxpayer money ends up in the pockets of shareholders” she contended. The apparent contradiction of Zalando’s recent profitability juxtaposed with the impending job losses has been labeled “perverse” furthering accusations that the company is prioritizing profit maximization through relocating logistics operations to cheaper locations, reinforcing a model of exploitative capitalism.
