More than 7,000 jobs in total – Continental announces further cuts

When a company says it plans to “strengthen the competitiveness” of its business, job cuts are usually not far away. And so it is at Continental, with the company yesterday confirming that in addition to the changes announced last November, further “efficiency measures” within the company’s Automotive group sector will affect around 1,750 jobs.

“These measures aim to increase the efficiency of Automotive’s global research and development network,” states Continental. The announced changes will result in “a number of the group sector’s 82 current development locations” being “streamlined” by the end of 2025 at the latest. This streamlining will involve pooling development units and leveraging synergies in work processes.

Of the approximately 1,750 jobs affected worldwide, 380 are at Continental’s software subsidiary Elektrobit. The company is also analysing a consolidation of locations in the Rhine-Main region, where it has more than 17 properties; in addition to its sites in Frankfurt-Rödelheim, Babenhausen, Eschborn, Karben, Schwalbach, Wetzlar and logistics centre in Groß-Rohrheim, Continental operates several smaller offices and laboratories there.

When adding the latest job cuts to the approximately 5,400 announced last autumn, we arrive at a figure of around 7,150. As Continental related in November 2023, its Automotive group sector aims to reduce annual costs by €400 million from 2025.

R&D ratio of 9% by 2028

“By streamlining our research and development network, we will leverage synergies and reduce costs. Combined with our focus on shortened development times and high-growth future technologies, this will improve our long-term competitiveness,” states Philipp von Hirschheydt, head of the Automotive group sector.

Continental estimates that expenditure on research and development (R&D ratio) within the Automotive group sector will amount to around 12 per cent of sales for 2023. At its Capital Market Day 2023, the company shared an intention to reduce this R&D ratio to less than ten per cent of sales in the medium term. As of yesterday, the target is to slim the R&D ratio down to nine per cent by 2028. Continental says that despite reducing this R&D radio, absolute expenditure on research and development can increase, provided sales growth meets expectations in the medium term.

“Research and development form the basis for innovation and growth,” says von Hirschheydt. “By increasing efficiency and pooling our research and development activities, we will enhance collaboration, leverage synergies and shorten development times – and thus improve our long-term competitiveness. In the medium term, we will focus our resources even more on future technologies for software-defined vehicles.”