Continental Prepares for Workforce Reduction Amidst Automotive Crisis
Continental, a leading automotive supplier, has announced plans to further reduce its workforce in the face of an ongoing automotive industry crisis. The company’s struggling Automotive Technologies segment will see the elimination of an additional 3,000 research and development positions worldwide by the end of 2026, with 1,450 of those cuts occurring in Germany.
Impact on German Locations
The restructuring will primarily affect Continental’s operations in Hesse and Bavaria. The company’s Nuremberg engineering facility will be permanently closed, leaving 140 employees without jobs. Significant cuts are also expected at the largest automotive site in Frankfurt (220 jobs) and the Babenhausen facility in Hesse (200 jobs). In Ingolstadt and Regensburg, 20 and 40 positions will be eliminated, respectively.
Fewer employees than initially planned will be transferred to other locations from Wetzlar and Schwalbach, where Continental had previously announced closures. This adjustment will result in an additional 200 job losses in Wetzlar and 10 in Schwalbach.
Electrobit Subsidiary Affected
Continental’s software subsidiary, Elektrobit, will also experience staff reductions. The company will cut 480 positions globally, with 330 of those cuts occurring in Germany. Specific details about the affected locations were not disclosed.
Global Workforce Impact
Overall, the announced layoffs represent approximately 10% of Continental’s 31,000 developer workforce worldwide. The company aims to implement the cuts through natural attrition, such as retirements.
Justification and Future Goals
Continental attributes the latest round of job cuts to the worsening automotive market conditions. The company’s goal is to reduce its research and development expenses below 10% of its revenue by 2028.
"Forward-looking technology offerings are crucial for our company," said Philipp von Hirschheydt, head of Continental’s Automotive Technologies segment. "We are therefore investing substantially in research and development in the coming years. At the same time, we are continuously improving our competitiveness to ensure our sustainable market success."
Criticism from Labor Union
The job cuts have been met with strong criticism from the labor union. "We are deeply concerned that the deep cuts in automotive research and development will escalate into a comprehensive clear-cut," said Michael Iglhaut, chairman of Continental’s works council. "Job cuts and cost reductions at any price" are not a viable future strategy.
The union argues that the "deliberate bleeding" of German locations will weaken the Automotive Technologies segment, which Continental plans to spin off and list on the stock exchange later this year.
Background of Automotive Technologies Spin-Off
Continental announced in December its intention to separate the struggling Automotive Technologies segment into an independent company and take it public. The company’s shareholders are yet to approve the move, and the IPO is scheduled for later this year. The segment has been a source of concern for Continental in recent years, consistently posting losses.
