Continental is cutting thousands of jobs worldwide as the components supplier and tyre-maker takes steps to reduce costs and bolster the competitiveness of its automotive unit.

The reductions are part of a plan to reduce annual costs by US$428 million, the company said on Monday (Nov 13). The exact number of job cuts isn’t yet decided, but is expected to be in the “mid four-digit range,” according to the statement.

ManagerMagazin reported earlier that the company plans to eliminate 5,500 jobs – 1,000 of them in Germany. 

Continental is fighting to stem a slide in profitability at its automotive unit, which has started to fall behind peers as the industry transitions to electric vehicles. The company is weighing options including divesting its autonomous mobility business or inviting in partners to join it, people familiar with the talks have said. The unit makes sensors for driver assistance functions and requires hundreds of millions of euros in further investments. 

The company began a long-term restructuring programme in 2020 that included eliminating or transferring 30,000 jobs by the end of the decade.

The job cuts announced on Monday are separate from that plan and are aimed at addressing cost and competitiveness issues at the automotive unit, which has a target of 2 per cent to 3 per cent adjusted Ebit margin this year and 6 per cent to 8 per cent in the midterm.  

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The unit achieved a 1 per cent adjusted Ebit margin in the first nine months of this year. BLOOMBERG