Continental, the German auto-parts maker, revealed plans to restructure its automotive business division in an effort to save hundreds of millions of euros annually. The company aims to achieve savings of around 400 million euros ($427.4 million) starting from 2025 through the proposed changes.
The exact number of job cuts in the automotive segment has not been determined yet, but it is expected to be in the “mid four-digit range,” according to a company spokesperson. It is worth noting that Continental’s automotive segment currently employs approximately 100,000 individuals out of a total workforce of 200,000.
While job reductions will be part of the restructuring process, the company also intends to transfer some positions to other areas within the organization.
One significant change involves the dissolution of Continental’s smart-mobility business area. Instead, the company will consolidate its automotive business into five distinct areas: architecture and networking, autonomous mobility, safety and motion, software and central technologies, and user experience.
Furthermore, Continental plans to implement additional measures to enhance competitiveness in the automotive industry. This includes exploring ways to improve efficiency within its research-and-development operations.
“These measures increase efficiency and effectiveness and strengthen our competitiveness,” said Philipp von Hirschheydt, an executive board member and head of automotive at Continental.
Despite reporting a profit in the third quarter compared to the previous year’s loss, cost-cutting remains a priority for Continental. The company’s shares were trading at EUR64.28, experiencing a 1.4% increase at 1043 GMT.
Continental will provide a more comprehensive update on its plans during its upcoming capital markets day, scheduled for December 4.