The economic situation in Germany is dire. Bureaucracy, expensive energy, and fierce competition are some of the challenges. Many companies are looking to reduce their workforce.
The German economy is on the brink of recession again this year – the industrial sector is particularly affected by the crisis. Pessimism dominates in the country’s largest companies. “They are suffering the most due to the decline in Germany’s ability to compete in the global market,” says Ulrich Kater, chief economist at Dekabank.
The weakness of the German economy is having very concrete consequences. “The industrial crisis and long-term economic decline are leaving marks on the labor market,” says Enzo Weber from the Institute for Labor Market Research (IAB). According to estimates, unemployment is expected to continue rising. Researchers predict that by spring, “no trend change is expected in Germany.”
Several large German companies have announced massive layoffs in the past weeks and months. These are the affected companies:
Schaeffler
Schaeffler, a company producing parts for the automotive industry, has announced layoffs and factory closures. Due to ongoing issues in the industrial sector and weak demand in the vehicle market, Schaeffler plans to cut 4,700 jobs, 2,800 of which are in Germany. A factory in Austria and one in the UK will also be shut down. The company also announced the suspension of production of some products in Berndorf, Austria, and the cessation of some productions in Sheffield, England.
Continental
Automobile supplier Continental also plans mass layoffs due to weaker sales in BMW, Mercedes, and other automotive giants, as well as problems in the electric car sector.
According to the company, by mid-2023, 5,000 jobs have already been eliminated in development, production, and administration. By 2028, the company plans to cut 7,150 jobs, more than a third of which are in Germany.
Volkswagen
The largest German car manufacturer (Volkswagen, which includes brands such as VW, Audi, Porsche, Seat, Skoda, Cupra, Lamborghini, Bentley, and Ducati) is facing a serious crisis. According to union representatives, three VW factories are currently at risk, and tens of thousands of jobs are threatened by cuts. The company lacks buyers for more than 500,000 vehicles, said Dirk Große-Loheide, a member of the VW brand’s board. “If there’s no demand, we need to adjust our production capacities to the current situation,” he added.
Volkswagen’s CEO, Thomas Schäfer, emphasized that current measures, such as early retirement, reduced working hours, and other cuts, are not enough to lower costs. Negotiations with the IG Metall union are ongoing, but no agreement has been reached so far. Negotiations will continue on December 9, but for now, tens of thousands of jobs are expected to be cut.
Bosch
Bosch, another major supplier of car parts, plans to cut up to 5,550 jobs – 3,800 of which are in Germany. Exact numbers will be decided in negotiations with worker representatives. The “Cross-Domain Computing Solutions” sector, which develops systems for vehicle assistance and autonomous driving, is particularly affected.
Bosch also plans to reduce working hours for many employees in Germany, which will result in lower wages. In total, around 10,000 workers in nine locations in Germany will be affected. The company cites the crisis in the automotive industry and weak demand as reasons, while results in emerging technologies like automated driving are underperforming compared to previous expectations.
ZF Friedrichshafen
Automobile parts supplier ZF Friedrichshafen plans to cut up to 14,000 of its 54,000 jobs in Germany. In Saarbrücken alone, 1,800 workers will be laid off by the end of 2025. If the difficult order situation continues, a total of 4,500 jobs may be cut by the end of 2028. The company does not rule out closing some factories.
ZF also faces large debts due to major acquisitions, while sales results are much lower than expected. “According to recent data, we will be missing three billion euros in revenue by the end of the year,” said Achim Dietrich, chairman of the Workers’ Council. Moreover, large debts stem from the purchase of other corporations.
Ford
American car manufacturer Ford plans to cut 2,900 jobs in Germany by 2027, most of them in the Cologne plant. In total, around 4,000 jobs will be cut across Europe. Although the company invested two billion euros in modernizing the Cologne plant in 2023 and 2024 for electric vehicle production, sales expectations were not met.
Thyssenkrupp
Germany’s largest steel manufacturer, Thyssenkrupp Steel, plans to cut around 11,000 jobs over the next six years. By the end of 2030, the number of employees will decrease from 27,000 to 16,000. The company aims to reduce production capacity and increase investments in environmentally friendly technologies, which require billions in investments. Additionally, the import of cheap steel from Asia and the crisis in the automotive industry pose significant challenges.
BASF
In 2022, BASF announced a cost-cutting program due to rising gas prices and difficult business conditions in Europe. An additional tightening plan was introduced earlier this year, which includes job cuts in Ludwigshafen. By 2026, BASF plans to reduce costs by one billion euros per year. By the end of 2024, the company will cut 3,300 jobs globally, including 2,500 in Ludwigshafen.
Three factories in Ludwigshafen will also be closed, including the production of adipic acid – a key component for plastics. While these measures are understandable in the current economic situation, they will leave thousands of workers without jobs and further worsen the labor market situation.
