On November 28, 2024, Germany's economy is on the brink of recession, marked by widespread pessimism among major corporations. Ulrich Kater, chief economist at Dekabank, noted that companies are particularly suffering due to Germany's declining competitiveness as a business location. Many firms are responding by announcing cost-cutting measures and layoffs, with researchers predicting a continued rise in unemployment.
Several large German companies have recently disclosed plans for mass layoffs. Schaeffler, a manufacturer of automotive parts, announced it will cut 4,700 jobs, including 2,800 in Germany, and close facilities in Austria and the UK due to ongoing issues in the industrial sector and weak demand in the automotive market.
Continental, another automotive supplier, is also planning significant layoffs due to reduced sales from major clients like BMW and Mercedes. The company has already eliminated 5,000 positions since mid-2023 and anticipates a total of 7,150 job cuts by 2028, with more than a third of these in Germany.
Volkswagen, the largest German car manufacturer, faces a crisis as union representatives indicate that three of its plants are at risk, potentially leading to tens of thousands of job losses. The company is struggling with a backlog of over 500,000 unsold vehicles. Volkswagen's management has expressed that current measures, including early retirement and reduced working hours, are insufficient to achieve necessary savings.
Negotiations with the IG Metall union are ongoing, but no agreement has been reached after three rounds of talks, with warning strikes planned for early December.
Bosch, another major automotive parts supplier, plans to reduce its workforce by up to 5,550 jobs, with more than two-thirds of these cuts occurring in Germany. The company cites the automotive crisis and weaker demand as primary reasons for these layoffs.
ZF Friedrichshafen, a parts supplier, is set to cut up to 14,000 jobs in Germany, with 1,800 layoffs expected in Saarbrücken alone by the end of next year. If order difficulties persist, the total job losses could reach 4,500 by 2028.
Ford, the American car manufacturer, plans to eliminate 2,900 jobs in Germany by 2027, primarily at its Cologne plant, contributing to an overall reduction of about 4,000 jobs in Europe despite significant investments in electric vehicle production.
Thyssenkrupp Steel, Germany's largest steel producer, aims to cut 11,000 jobs over the next six years, reducing its workforce from 27,000 to 16,000 by 2030. The company is focusing on decreasing production capacities and investing in environmentally friendly technologies amidst challenges from cheap steel imports from Asia.
BASF announced a cost-cutting program last year due to rising gas prices and difficult business conditions in Europe. The company plans to eliminate 3,300 jobs globally by the end of 2024, with 2,500 of those in Ludwigshafen, alongside the closure of three facilities.
These austerity measures, while understandable in the current economic climate, leave thousands of workers unemployed and exacerbate the labor market situation.