More Than 100,000 Jobs Chopped: The German Industry Takes a Hit
Massive Layoffs: Over 100,000 Positions Eliminated in German Industries within a Year - Rapid job reductions: Over 100,000 positions eliminated in German businesses within a year
Looks like the ongoing economic rollercoaster has claimed over 100,000 jobs in the German industry within a year, as per an analysis by EY, shared with the German Press Agency [1]. The automotive sector was the hardest-hit, shedding around 45,400 net jobs [2].
At the end of the first quarter, the German industry employed 5.46 million people - that's a 1.8% decrease or 101,000 less employments compared to a year ago, according to the study [2]. Since the good ol' pre-Corona days of 2019, the workforce has shrunk by 217,000 or 3.8% [2]. Back in 2018, there were a whopping 5.7 million industrial jobs [2].
Jan Brorhilker, Managing Partner at EY, thinks industry players are under a massive heatwave. "Companies are dealing with intense competition, especially from China, wavering sales markets, stagnant European demand, and uncertainty regarding the entire US market. Amidst all this, they're grappling with high operational costs – for energy and labor, for instance" [3].
More Layoffs on the Horizon
Things seem to be still going downhill for the industry. After a slump at the start of the year, the industry turnover continued to slide. No light at the end of the tunnel just yet, says Brorhilker. He's expecting at least 70,000 more industrial positions to vanish by year's end [3]. Companies in the machinery and automotive sectors are actively implementing cost-cutting programs [3]. "We'll still face a barrage of bad news before things start looking up again," Brorhilker adds.
The automotive industry, dealing with sales slumps, tough competition from China, and the transition to electric vehicles, lost around 6% of its jobs in a year. By March, employment plummeted to around 734,000 people [2]. Job reductions were also substantial in the metal and textile industries, by over 4% each. However, the chemical and pharmaceutical industries barely lost any jobs, with a decrease of 0.3% [2].
Long-term Job Growth for Industry
Critics have been sounding the alarm about the future of Germany's industrial sector. But, in the long run, employment in the industry has increased: By the end of 2024, it rose by 3.5% or 185,000 people compared to 2014 [4].
Brorhilker, the EY manager, explains, "Germany's industrial sector has been written off as dead more times than we can count – and it keeps bouncing back thanks to a robust foundation. However, conditions need to improve – we need cheaper costs, less bureaucracy, and higher domestic demand to make the economy less dependent on exports." [4]
One of the ways to enhance domestic demand is through the billion-dollar investment package of the federal government [4].
Automotive Sector Demands Reforms
The Association of the Automotive Industry (VDA) also believes politics plays a role. VDA President Hildegard Müller points out that competitiveness has been waning in recent years. "We need to prioritize competitiveness and attractiveness for the new federal government. After all, it's these factors that dictate where and to what extent investments are made, and hence, future job opportunities" [5].
- Industry
- Job
- Germany
References
[1] German Press Agency[2] EY analysis[3] Brorhilker, Jan (EY Managing Partner)[4] Federal Statistical Office[5] German government policies
- The ongoing economic downturn has led to the loss of over 100,000 jobs in Germany's industry within a year, as highlighted in the EY analysis.
- Jan Brorhilker, Managing Partner at EY, anticipates at least 70,000 more industrial positions will be eliminated by the end of the year, signifying continued job losses in the industry of Germany.
