Tier1 giants cut 7,150 people!R&D administration is optimized, and the goal is to reduce costs by 3 billion
The 100-year-old Tier 1 mainland confirmed that it will lay off about 7,150 employees.
The scale of the layoffs is much larger than previously revealed.
In the announcement confirming the number of layoffs, Continental also emphasized that it will reduce R&D spending as a percentage of revenue.
This is the concrete implementation of Continental's 400 million euro cost reduction plan.
Among the supplier giants, the mainland is not the only one that has laid off employees and reduced costs.
Continental, Bosch, ZF, Valeo... In just three months, the four supplier giants plan to lay off more than 21,000 employees.
百年Tier 1裁员7150人
Continental announced that it will eliminate 1,750 R&D positions in the automotive business, and will also optimize about 5,400 administrative positions, with a total of about 7,150 layoffs, which will be completed by the end of 2025 at the latest.
The layoffs were announced by Continental in November last year, but the exact number was not given at the time.
The first news in the local media was that there were 5,500 people, 20 percent of whom were German employees.
Now the boots have landed, and the scale is much larger than the previous news, but in the announcement and reply to the media email, the mainland did not mention the specific regions involved in the layoffs, only said that the software subsidiary would lay off 380 people.
Some R&D personnel were laid off, and the proportion of R&D investment in revenue was also reduced.
Continental expects its R&D spending to account for about 12% of revenue in 2023, and plans to reduce it to less than 10% in the future and 9% in 2028.
In response, Continental said that although the proportion of R&D has decreased, absolute spending on R&D will increase based on the expected growth.
R&D spending will increase, but the proportion will not be as high as before.
In November last year, Continental announced that it would streamline its operations and administrative structure, with the goal of reducing costs by 400 million euros (about 3.087 billion yuan) per year.
According to the head of the automotive division, streamlining the R&D staff will increase efficiency and allow resources to be more focused on "the future technologies of software-defined vehicles."
That said, but the direct cause of the layoffs is that automobiles are the only loss-making business in the mainland.
In 2022, Continental's automotive division suffered a pre-tax loss of 970 million euros, equivalent to about 7.487 billion yuan.
The loss in 2023 has narrowed a lot, with a loss of more than RMB 200 million in the first three quarters.
However, this is the fifth consecutive year that the automotive division has lost money.
But the losses weren't enough to cause such large-scale layoffs, nor did they explain the wave of layoffs among supply chain giants.
The fundamental reason for the earthquake involving 21,000 layoffs and the forced Tier 1 mainland to move is the new energy transition.
Tires started to become giants, and the transformation of the new wave was blocked
Founded in 1871, Continental started by making tires in the early years, and has been the only business for a long time, and its Continental tires are still well-known all over the world, and the tire business is also the profit cow of Continental.
The world's first treaded car tires came from the mainland, as well as detachable car wheels, carbon black tires, tubeless tires, radial tires, etc., which can be said to be the foundation of the contemporary tire industry.
After relying on tires to become bigger, the mainland sought to expand.
Since the end of the 70s of the 20th century, the mainland has carried out a series of mergers and acquisitions, incorporated a number of international companies, and entered the global market.
During this period, Continental's automotive division was established, integrating the original auto parts business, such as wire rope conveyor belts, hydraulic suspensions, etc., and officially began to transform into a Tier 1 in the automotive industry.
Later, the product line gradually covered tires, rubber and plastic products, body electronics, powertrain, chassis and safety and other fields.
Except for a brief setback due to the financial crisis, the rest of the time Continental has been soaring.
In 2018, the Group's business reached an all-time high: sales of 44.4 billion euros, net profit of 2.9 billion euros and a market capitalization of more than 50 billion euros.
It was also in this year that Continental sensitively grasped the changes in the industry and started to adjust its organizational structure to cope with the new energy wave.
Intensify efforts to develop autonomous driving and Internet of Vehicles technologies. The powertrain business was spun off and listed as Vitesco Technologies.
Continental's transformation has also paid off, with the HPC intelligent cockpit solution and the joint development of autonomous trucks with Aurora.
However, the results of the transformation have been mediocre, and the progress is not fast, and the self-driving trucks jointly developed with Aurora will not be implemented until 2027.
At present, the company's news page is more about showing its own tires.
The relationship between external suppliers and car companies is also changing, and car companies are more willing to take the core technology of cockpit and intelligent driving into their own hands.
At the same time, with the trend of modular and "nesting doll" car manufacturing, the development and production time of new vehicles has been greatly shortened, and it is also a challenge for traditional suppliers to adapt to such a process.
Now, the transformation problem is in front of the supplier giants such as Mainland, and some giants have given the same initial response strategy:
Layoffs and cost reductions.
In December 2023, Bosch, the world's No. 1 Tier 1, confirmed that it plans to lay off about 1,500 employees in the drive business, which will be completed by the end of 2025.
In January 2023, Bosch announced a new round of layoffs, involving about 1,200 employees.
At about the same time, ZF also announced a major layoff of 12,000 people, and Valeo also confirmed that it will cut 1,500 jobs worldwide.
In just three months, Bosch, Continental, ZF and Valeo, four world-renowned suppliers, have laid off employees one after another, with a cumulative number of layoffs exceeding 21,000.
The old ships of the century-old giants can't catch up with the Sina of smart cars, and the glorious years are no more, so they have to lay off employees and reduce expenditure, concentrate resources to overcome key points, and find ways to regain competitiveness.
The results of the 2023 intelligent driving selection
After extensive solicitation, professional recommendation, and 10,000 votes from the smart car reference vertical community, the 2023 smart car selection results were officially released. There are three categories of awards:
· Top 10 smart car leaders
· Top 10 smart car products
· Top 10 smart car technology solutions
At a time when the automotive industry is ushering in major changes unseen in a century, we hope to provide a reference and footnote for the intelligent dimension.
Among them, the top ten smart car technology solutions are:
— END —
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