Industry Expected to Cut 100,000 Jobs by 2025 Amid Economic Challenges
Wed 26th Feb, 2025
The German manufacturing sector is poised to face significant job losses in the coming years, with projections indicating that an additional 100,000 positions may be eliminated by 2025. This forecast stems from a recent study conducted by a prominent consulting firm, which highlights the ongoing economic difficulties and industrial transformations affecting the sector. In 2024 alone, approximately 70,000 jobs were lost in the industry, exacerbating an already challenging employment landscape. The anticipated job cuts are largely attributed to a sluggish economy and the ongoing transformation within the manufacturing sector. Experts believe that the layoffs announced by major industrial players in recent months will soon be reflected in employment statistics. According to the study, the overall workforce in the sector has decreased by 141,400 jobs since the pre-pandemic year of 2019. The German industry has been struggling for an extended period, facing headwinds from a weak global economy and soaring energy prices. Companies that were previously thriving are now contending with intensified competition, particularly from China. In addition, the revenue generated by German industrial firms fell by 3.8% last year compared to the previous year, as reported by the EY Industry Barometer. Notably, the electrical engineering sector experienced a dramatic 7.5% decline in revenue, while the metal and automotive industries saw reductions of 5.1% and 5.0%, respectively. The relationship between employment levels and revenue trends is often delayed, as companies typically attempt to avoid layoffs for as long as possible. However, as the economic crisis deepens, it has become increasingly clear that significant workforce reductions may be unavoidable. Additionally, the relocation of production facilities abroad is expected to further impact job availability in Germany. As businesses grapple with the substantial challenges they face domestically, many are choosing to invest in new projects overseas. Rising risks associated with trade conflicts are also influencing corporate strategies, prompting large industrial firms to establish production capabilities in foreign markets. Despite the anticipated changes in government, experts do not foresee a turnaround in the industry this year. The current focus for manufacturing companies will likely revolve around cost-cutting measures, enhancing flexibility, and improving competitiveness in an increasingly demanding global market.
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