Dive Brief:
- Continental announced Thursday it would "streamline" its research and development division. The moves could affect 1,750 positions by the end of 2025 as the company restructures its operations.
- The changes are spread across 82 locations, including 380 roles at software subsidiary Elektrobit.
- Continental plans to lower its R&D spending to 9% of expenditures by 2028 after spending an estimated 12% of its costs on R&D in 2023.
Dive Insight:
Continental announced in November that it would overhaul its business amid the electric vehicle transition, aiming to slash costs by 400 million euros ($430.8 million) annually starting in 2025.
In December, Continental laid out a new strategy to increase sales and margins across its three core industries — parts, tires, and rubber and plastics.
The auto supplier’s plans could affect 5,400 staff members, including the recently announced staffing changes. Continental may also consolidate its facilities in Germany’s Rhine-Main region, but it has not decided yet.
“By streamlining our research and development network, we will leverage synergies and reduce costs,” said Philipp von Hirschheydt, executive board member and head of automotive, in a statement. “Combined with our focus on shortened development times and high-growth future technologies, this will improve our long-term competitiveness.”
Continental also plans to reduce its automotive business from six to five units to save money. The company dissolved its now-shuttered Smart Mobility unit into the rest of its automotive business before announcing in December that it would spin off its user experience business.
In addition to staff reductions and streamlining its operations, Continental plans to develop new technologies for software-defined vehicles, von Hirschheydt said.
