A significant number of German companies are preparing for job cuts in the coming year, reflecting a widespread sense of economic uncertainty. According to a survey by the Institute of the German Economy (IW), 38% of more than 2,000 firms anticipate reducing their workforce. This sentiment stems from concerns over a bleak economic outlook, with 40% of businesses expecting deteriorating conditions.
The survey reveals a pervasive pessimism, reminiscent of the 2008 financial crisis. Only 20% of respondents feel optimistic about the future, while a substantial 40% foresee a decline in their investments. These findings suggest a prolonged period of economic stagnation, with no clear signs of recovery on the horizon.
Particularly hard-hit is the industrial sector, where major companies like Volkswagen, Ford, Bosch, ZF, and Thyssenkrupp have announced significant job cuts. This marks the end of a long-standing trend of employment growth in Germany since 2005, signaling a shift in the labor market dynamics.
In contrast, the ManpowerGroup’s 2025 labor market barometer indicates stable employment prospects in certain regions and sectors. IT, finance, and real estate show strong demand, with Frankfurt leading in job opportunities. However, industries such as transport, automotive, and logistics face tougher challenges.
Overall, the survey highlights a challenging economic landscape, with many companies bracing for reduced business activity and investment. Despite pockets of employment growth, the overarching mood remains one of caution and restraint, as businesses navigate through uncertain times.
