(Bloomberg) -- Continental AG is cutting around 7,150 positions in its struggling auto unit to make the business more competitive for the complex shift to electric vehicles and digital offerings.

The reduction amounts to roughly 3.6% of the Hanover-based manufacturer’s global workforce. The company is also looking to pool sites in Germany and elsewhere, including across research and development functions, it said Wednesday.

German industry stalwarts are facing a wrenching transition to a cleaner economy. Under pressure to cut expenses while having to invest in new technologies, Continental has also started reviewing possible divestments, joint ventures and partnerships at the auto unit that’s fallen behind peers. 

Read More: Germany’s Days as an Industrial Superpower Are Coming to an End

About 1,750 position in research and development will go, with the remaining 5,400 cut from administrative roles, the company said. About 40% of the reductions will affect employees in Germany.

Continental late last year detailed savings goals of around €400 million ($428 million) annually starting next year, including an indication the company would cut thousands of jobs. At the time, powerful Chairman Wolfgang Reitzle said the company was ‘ready for anything’ to fix its auto unit. 

Read More: Continental ‘Open For Anything’ to Fix Auto Unit, Chairman Says

Some 17 sites in the Rhine-Main area will be reviewed in addition to some other locations, a company spokesperson said Wednesday. 

Continental also outlined plans to reduce R&D spending to 9% of sales by 2028, from an expected 12% this year.

Germany auto supplier heavyweights Continental, Robert Bosch and ZF Friedrichshafen are bracing for muted car production this year due to a slowdown in electric-vehicle demand, alongside low visibility on growth in China. 

(Updates with with additional detail throughout)

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