Germany's Continental plans major job cuts in auto division
What's the story
Continental, a German auto parts manufacturer, revealed plans to eliminate thousands of jobs globally in its automotive division, with the goal of saving €400 million (Rs. 3,560 crore) annually by 2025.
The exact number of job losses remains uncertain, but the company indicated it would be in the "mid-four-digit range."
This decision follows reports of Continental's restructuring and potential sell-offs, as CEO Nikolai Setzer contemplated a shift in ownership for the ContiTech division in September.
Details
Restructuring move could affect 5,500 jobs
German business publication Manager Magazin estimates that the automotive division's job cuts could total around 5,500 positions, with over 1,100 of them affecting the company's 30 sites in Germany.
As of late 2022, Continental employed approximately 200,000 individuals across 57 countries and markets.
While the company's statement on Monday did not confirm the figure reported by Manager Magazin, it did note that the cuts would primarily target simplifying and streamlining its business and administrative structure.
What Next?
Smart mobility segment to be dissolved
In an effort to restructure, Continental intends to decrease the number of business areas within its automotive division from six to five.
The Smart Mobility segment will be disbanded and integrated into other areas.
The company's objective is to streamline various aspects of its operations, from sales and research and development to production. A comprehensive strategy update is anticipated to be shared at Continental's capital markets day on December 4.
Insights
Addressing challenges in the automotive industry
Continental's proactive response to challenges in the automotive industry mirrors a larger trend among manufacturers who are strategically adapting to fluctuating market conditions and exploring ways to remain competitive.
Bloomberg cited a Continental representative named Marc Siedler, who underscored the company's commitment to enhancing the automotive division's competitiveness.
He mentioned that the plan includes potential changes in administrative structures to enable quicker and more nimble decisions in the future and to mitigate costs.