German auto parts supplier Continental announced major reductions in its workforce on Tuesday, including the shuttering of one of its plants.
Continental said the downturn in Germany’s automotive industry was the reason for its cost cutting measures.
What did Continental say about the layoffs?
Some 3,000 research and development jobs in Continental’s automotive division will be slashed by the end of 2026, with more than half of the cuts hitting plants in Germany.
The company’s Nuremberg facility will be shuttered, while other plants in the German states of Hesse and Bavaria will also be affected.
A company spokesman said the company will fall short of financial targets, despite Continental’s earlier cutbacks, due to the challenging market situation.
“Forward-looking technology offerings are of crucial importance to our company,” Continental’s top executive for the automotive division, Philipp von Hirschheydt, said in a press release.
Hirschheydt said the firm will continue “investing substantially in research and development in the coming years” even as it looks to improve “competitive strength in the interests of our sustainable market success.”
Continental announced a round of cuts one year ago, as part of cost-savings efforts, which saw the elimination of 7,150 jobs in its automotive division.
‘Not a sustainable future’
The company said it plans to be as socially responsible with the layoffs as possible, with most of the reductions made by not replacing employees who retire or quit.
Employee and trade union representatives will now negotiate with the firm over the details.
But worker representatives have sharply criticized the move.
“We are deeply concerned that the deep cuts in automotive research and development will escalate into a comprehensive restructuring,” said Michael Iglhaut, head of Continental’s General Works Council, in a statement.
“Job cuts and cost reductions at any price” are not a sustainable strategy for the future, he said, adding that the “deliberate bleeding of the German locations” weakens the overall automotive division at the company, which Continental intends to make independent this year.
The company’s shareholders still need to approve that plan at Continental’s upcoming general meeting.
Edited by: Saim Dušan Inayatullah
