Continental Announces Reduction of 3,000 Jobs Amid Industry Challenges

Continental AG, a major auto parts supplier, has unveiled plans to cut an additional 3,000 jobs as part of its ongoing cost-cutting strategy aimed at preparing its struggling automotive division for a potential stock market launch. This decision comes in light of persistent difficulties facing the automotive sector.

According to the company, the layoffs will primarily impact its research and development teams, with 1,450 positions in Germany alone being affected. Key locations facing job losses include Hessen and Bavaria, with the Nürnberg site set to close entirely.

This latest announcement follows a previous commitment made by Continental last year to eliminate 7,150 positions within its automotive division, primarily through administrative and developmental reductions. Approximately 80 to 90 percent of those reductions have already been implemented. With the new cuts, the total number of jobs lost within this sector has now exceeded 10,000.

The Frankfurt facility, which employs around 4,000 people and is the largest site in its automotive division, will see around 220 development roles eliminated. The Babenhausen facility, which currently has about 1,800 employees, will also experience significant job cuts. Additionally, smaller reductions will occur in Ingolstadt and Regensburg, affecting 20 and 40 roles, respectively. The previously announced closures in Wetzlar and Schwalbach will now result in 200 and 10 additional job losses compared to initial projections.

Continental's software subsidiary, Elektrobit, is also set to reduce its workforce, with 480 positions being eliminated, of which 330 are based in Germany. Specific details regarding the locations of these job cuts have not been disclosed by company representatives.

Overall, approximately ten percent of Continental's 31,000 development roles globally will be impacted. The company aims to manage this workforce reduction in a socially responsible manner, relying on natural attrition methods such as retirements to minimize the impact on employees. Further discussions regarding the details of these adjustments are expected to take place with employee representatives.

A spokesperson for Continental stated that the current market conditions have necessitated further measures to achieve the company's financial objectives. The goal remains to reduce research and development expenditures to below ten percent of total revenue by 2027.

Philipp von Hirschheydt, head of the automotive division, emphasized the importance of future-oriented technological offerings for the company. He noted that Continental plans to make substantial investments in research and development over the coming years while concurrently enhancing its competitive position in the market.

However, this announcement has drawn sharp criticism from labor representatives. Michael Iglhaut, the head of the works council, expressed deep concern over the extensive cuts to the automotive research and development division, labeling the strategy of job reductions and cost-cutting as unsustainable for the future. He warned that the systematic weakening of German sites undermines the division's viability as Continental moves towards separating this part of the business into an independent entity slated for a stock market listing later this year.

Continental's automotive division has long been viewed as a financial burden for the company, consistently reporting losses over recent years. The upcoming public offering is intended to address these ongoing challenges, pending approval from the company's shareholders.