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The days are getting more and more difficult, auto parts companies are laying off employees, and Continental Group is expected to lay off nearly 10,000 employees

The days are getting more and more difficult, auto parts companies are laying off employees, and Continental Group is expected to lay off nearly 10,000 employees

The days are getting more and more difficult, auto parts companies are laying off employees, and Continental Group is expected to lay off nearly 10,000 employees
The days are getting more and more difficult, auto parts companies are laying off employees, and Continental Group is expected to lay off nearly 10,000 employees

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In recent years, in addition to the gradual layoffs of vehicle manufacturers, auto parts companies are also streamlining personnel.

A few days ago, Continental, a German auto parts manufacturer that is a giant in the automotive supply chain, announced that it has officially started its research and development and other departments to lay off employees. According to the auto show, Continental's layoffs may exceed 7,150 people, about 3.6% of Continental's total employees in the global market. Regarding this round of layoffs, Continental said that it will focus on the development of high-growth cutting-edge technology fields by improving R&D efficiency, while reducing the company's costs.

The days are getting more and more difficult, auto parts companies are laying off employees, and Continental Group is expected to lay off nearly 10,000 employees

According to public information, Continental was founded in 1871. The Company's business scope includes the production of rubber products such as tires, braking systems, body stability control systems, engine injection systems, tachometers, and other parts for the automotive and transportation industries.

Obviously, in the current environment, even the auto parts supplier giant Continental is facing greater pressure to reduce employees and focus on high-growth technology. According to Continental, the layoffs will be completed by the end of next year.

In addition, Continental's unsatisfactory revenue in 2023 is also an important factor in the company's cost reduction. According to the data, in the third quarter of 2023, Continental's sales were only 10.2 billion euros, down 1.5% from the same period in 2022. Among them, the sales of the automotive subgroup in the third quarter were 5 billion euros, a year-on-year increase of 1.8%. Compared with the first two quarters of last year, the revenue of the automobile subgroup has improved, but the loss is still not small, with a loss of about $28.23 million in the first three quarters.

The days are getting more and more difficult, auto parts companies are laying off employees, and Continental Group is expected to lay off nearly 10,000 employees

It is not without warning that Continental has launched a layoff plan. As early as November 2023, Continental announced that the company will adjust the business within the group and simplify the company's administrative structure, and is expected to reduce costs by 400 million euros (now equivalent to about 3.1 billion yuan) per year by 2025.

According to Cheze, the automotive sector of Continental currently has 82 R&D centers around the world. As the layoffs progress, the number of R&D centers in Continental's automotive segment around the world may decline, but the company's overall competitiveness will improve. Philipp von Hirschheydt, Head of Continental Automotive Group and Member of the Executive Board, said that the company will further enhance its long-term competitiveness by integrating its R&D network, achieving synergies and cost reductions, while shortening development cycles and focusing on technologies with high-growth prospects.

It is worth mentioning that in addition to Continental's layoffs, auto parts giants such as Bosch and ZF are also carrying out strategic contractions and layoffs. Among them, the Bosch Group said as early as December last year that it plans to lay off up to 1,500 employees at its two German plants by 2025 in order to adapt to the needs of the automotive industry and technological changes. Bosch also stressed that it will avoid mandatory layoffs in its mobility division in Germany by the end of 2027.

The days are getting more and more difficult, auto parts companies are laying off employees, and Continental Group is expected to lay off nearly 10,000 employees

In early February, Dr. Group also issued a warning that the company could lay off employees in its mobility division and postpone its target profit margin of 7% by one to two years due to the forecast of a bleak economic environment in 2024. In addition, auto parts suppliers such as Valeo and ZF have also announced layoffs. Among them, ZF has previously said that it will lay off 12,000 employees by 2030, while internal employees predict that the actual number of layoffs could be as high as 18,000.

As the automotive industry ushers in a major change unseen in a century, the entire automotive industry is facing greater pressure. In order to maintain the company's financial health and sustainable and high-quality development, enterprises have to open up sources and reduce expenditure, while investing resources in high-growth areas such as intelligence and electrification.

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