Germany's Industrial Sector Faces Significant Job Losses Amidst Rising Unemployment
Research indicates more than 10,000 jobs are being lost each month in Germany's industrial sector, with major companies planning layoffs amidst a struggling economy.
Germany is experiencing a rise in unemployment, particularly in the industrial sector, where many firms are planning job cuts.
New job openings are primarily in the service sector, which often offers lower wages.
Lukas Emerih, a 21-year-old supervisor for the loading of passenger aircraft with Lufthansa at Frankfurt Airport, represents a sector still capable of generating employment.
Having trained as a mechatronics technician, he has pursued a career in aviation.
Lufthansa aims to hire approximately 10,000 new employees globally this year, with more than half of these positions slated for Germany.
A survey conducted by the Institute of the German Economy in Cologne reveals that only 17% of companies plan to increase their workforce this year, while 38% intend to reduce it.
Within the industrial sector specifically, 44% of companies anticipate downsizing, with only 14% expecting to hire new staff.
The institute notes that this indicates a continuation of the decline in industrial employment throughout 2024, with the number of employed persons in the sector decreasing from nearly 7.8 million in 2019 to around 7.4 million by November 2024, resulting in a loss of approximately 350,000 jobs.
Enco Weber, a researcher at the Institute for Employment Research in Nuremberg, has been observing the deterioration of the job market due to the ongoing economic crisis.
He notes that Germany is currently in an economic downturn, significantly impacting the labor market, with unemployment rising for the third consecutive year.
Following an extended period of low unemployment rates consistently below six percent since 2017, the rate reached six percent last year and climbed to 6.4 percent in January and February of this year.
Weber emphasizes that employment levels remain relatively stable but are heavily supported by gains in the service sector that are offsetting losses in industry.
The industrial sector is particularly hit hard by the crisis, shedding more than 10,000 jobs each month.
Major companies such as ZF, Continental, Thyssenkrupp, and Volkswagen report that approximately 70,000 jobs may be at risk in the coming years, with firms like Schaeffler, Porsche, Bosch, and Ford also planning to cut thousands of positions.
Pablo Ole Schmitt, a software engineer at ZF in Friedrichshafen, has worked there for nearly 20 years and now faces uncertainty regarding his job.
Historically, leaving ZF before retirement was uncommon.
Reports indicate that ZF is considering spinning off its “Electrified Drive Technologies” sector, potentially affecting over 32,000 employees, or one-fifth of its workforce.
The demand for skilled labor in Germany has been decreasing.
A study from the Ifo Institute shows that by January 2025, only 18% of industrial firms reported a shortage of skilled workers, down from 44.5% in the third quarter of 2022. Overall, the shortage of qualified workers in Germany is diminishing, though the services sector still experiences above-average demand at 35.1%.
Weber remarks that this decline in skilled labor shortages is not merely a sign of current companies' challenges; the establishment of new firms in the industrial sector has hit unprecedented lows, with new investments declining for several years.
Amidst these layoffs, the military industry in Germany is flourishing.
Rheinmetall, the country’s largest arms manufacturer, reported a revenue increase of over 30% in the first nine months of the current fiscal year.
Facilities that previously produced civilian components for vehicles may soon shift to military production.
Some former ZF employees have found new positions in the military industry; however, Schmitt has ruled this option out, citing financial cuts already underway at ZF that have reduced his weekly hours and salary by around 14%.
Despite the cuts, workers in industrial firms remain among the highest earners.
In April 2024, full-time employees in Germany earned an average gross salary of €4,634, whereas those in the industrial sector earned €100 more on average.
In contrast, service sectors such as hospitality and transport reported lower average gross salaries, falling below industrial averages.
New job openings are primarily in the service sector, which often offers lower wages.
Lukas Emerih, a 21-year-old supervisor for the loading of passenger aircraft with Lufthansa at Frankfurt Airport, represents a sector still capable of generating employment.
Having trained as a mechatronics technician, he has pursued a career in aviation.
Lufthansa aims to hire approximately 10,000 new employees globally this year, with more than half of these positions slated for Germany.
A survey conducted by the Institute of the German Economy in Cologne reveals that only 17% of companies plan to increase their workforce this year, while 38% intend to reduce it.
Within the industrial sector specifically, 44% of companies anticipate downsizing, with only 14% expecting to hire new staff.
The institute notes that this indicates a continuation of the decline in industrial employment throughout 2024, with the number of employed persons in the sector decreasing from nearly 7.8 million in 2019 to around 7.4 million by November 2024, resulting in a loss of approximately 350,000 jobs.
Enco Weber, a researcher at the Institute for Employment Research in Nuremberg, has been observing the deterioration of the job market due to the ongoing economic crisis.
He notes that Germany is currently in an economic downturn, significantly impacting the labor market, with unemployment rising for the third consecutive year.
Following an extended period of low unemployment rates consistently below six percent since 2017, the rate reached six percent last year and climbed to 6.4 percent in January and February of this year.
Weber emphasizes that employment levels remain relatively stable but are heavily supported by gains in the service sector that are offsetting losses in industry.
The industrial sector is particularly hit hard by the crisis, shedding more than 10,000 jobs each month.
Major companies such as ZF, Continental, Thyssenkrupp, and Volkswagen report that approximately 70,000 jobs may be at risk in the coming years, with firms like Schaeffler, Porsche, Bosch, and Ford also planning to cut thousands of positions.
Pablo Ole Schmitt, a software engineer at ZF in Friedrichshafen, has worked there for nearly 20 years and now faces uncertainty regarding his job.
Historically, leaving ZF before retirement was uncommon.
Reports indicate that ZF is considering spinning off its “Electrified Drive Technologies” sector, potentially affecting over 32,000 employees, or one-fifth of its workforce.
The demand for skilled labor in Germany has been decreasing.
A study from the Ifo Institute shows that by January 2025, only 18% of industrial firms reported a shortage of skilled workers, down from 44.5% in the third quarter of 2022. Overall, the shortage of qualified workers in Germany is diminishing, though the services sector still experiences above-average demand at 35.1%.
Weber remarks that this decline in skilled labor shortages is not merely a sign of current companies' challenges; the establishment of new firms in the industrial sector has hit unprecedented lows, with new investments declining for several years.
Amidst these layoffs, the military industry in Germany is flourishing.
Rheinmetall, the country’s largest arms manufacturer, reported a revenue increase of over 30% in the first nine months of the current fiscal year.
Facilities that previously produced civilian components for vehicles may soon shift to military production.
Some former ZF employees have found new positions in the military industry; however, Schmitt has ruled this option out, citing financial cuts already underway at ZF that have reduced his weekly hours and salary by around 14%.
Despite the cuts, workers in industrial firms remain among the highest earners.
In April 2024, full-time employees in Germany earned an average gross salary of €4,634, whereas those in the industrial sector earned €100 more on average.
In contrast, service sectors such as hospitality and transport reported lower average gross salaries, falling below industrial averages.
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