German automotive manufacturing company, Continental AG is planning to cut jobs globally. The company may also sell some combustion-engine component businesses.
According to the Chief Financial Officer of the company, the job cut could affect the global workforce. While he denied discussing numbers or potential restructuring costs because negotiations with unions are underway. Currently, the company employs about 244,000 people in 60 countries.
The latest move underlines the determination for manufacturers to adapt their operations to a rapidly changing industry. Stricter emission regulations in China and Europe are forcing vehicle manufacturers to sell more electric cars, at a time of weakening global demand after a decade of almost constant growth.
While Continental has sufficient scale and a strong presence in the growing electronics components business, many smaller peers specialized in traditional combustion-engine technology are getting squeezed.
Signals for suppliers from major auto manufacturers point to a persistent market weakness. Volkswagen AG reduced production plans for this year by about 450,000 cars to adapt to cooling demand and avoid the buildup of inventory. BMW AG also said it would align production plans with demand.
Earlier last month, Continental cut its full-year financial outlook, joining a host of automotive companies in lowering annual targets due to softening demand in key regions including China and Europe.