Continental is cutting around 7,150 jobs in the automotive supply sector worldwide

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Continental headquarters in Hanover: share price up after announcement of further job cuts

Photo: Philip Dulian / dpa

The Continental Group is cutting even more jobs than before in the weakening automotive supply business. The DAX company announced that around 7,150 jobs will now be lost there worldwide. This corresponds to more than three percent of the total workforce. In addition to the measures already announced in the division's administration, the plans now also affect employees in research and development.

There are around 5,400 jobs available in the administrative areas, and around 1,750 more in the research and development network. In the Rhine-Main area, division boss Philipp von Hirschheydt is also examining the merger of locations. Continental says it wants to reduce jobs gradually and in the most socially acceptable way possible.

High research expenditure

The group had already announced extensive cost-cutting efforts in automotive supply. According to information from November, annual costs should fall by 400 million euros by 2025 with the reduction of jobs in administration. The company had previously announced job cuts in the mid-four-digit range.

Continental has begun to transform its traditional automotive business by producing components for combustion vehicles – and converting it to electromobility. Annual savings of more than one billion euros per year were already planned in 2020, and up to 30,000 jobs were already considered threatened at that time. There were still more than 100,000 employees working in the automotive supplier business in the fall, and there were more than 200,000 across the group.

After the announcement of the job cuts, Continental shares were among the ten biggest DAX winners of the day. Most recently, the price rose by 0.9 percent to 77.10 euros. Investors are apparently hoping that the savings measures will increase the efficiency of the tire manufacturer and car supplier.

Investors have long complained that Continental not only earns little in the automotive supply sector, but also spends a comparatively large amount of money on research. In 2028, the share of research and development expenditure in the division's sales is expected to fall to nine percent. It is currently around twelve percent. So far, Conti had promised a value of less than ten percent as a benchmark for the medium term, i.e. over the next three to five years.

“By streamlining our research and development network, we are leveraging synergies and reducing our costs,” said Hirschheydt’s division manager. “We are aware of the cuts for our employees and will do everything we can to find good, individual solutions together with our social partners.” The plans also affect 380 jobs at the software subsidiary Elektrobit, which has its headquarters in Braunschweig .

apr/dpa