German Industry Faces Major Job Losses Amid Ongoing Economic Crisis

The persistent economic downturn has led to the loss of over 100,000 jobs in the German industrial sector within a year. According to a recent analysis by the consulting firm EY, the automotive industry has been hit the hardest, with approximately 45,400 jobs eliminated.

As of the end of the first quarter, the German industrial workforce stood at 5.46 million, reflecting a decline of 1.8 percent or 101,000 positions compared to the previous year. The report, based on data from the Federal Statistical Office, indicates that since the pre-COVID year of 2019, the total number of jobs has decreased by 217,000, marking a 3.8 percent drop. In 2018, the industrial sector recorded a peak employment level of around 5.7 million.

Further job reductions are anticipated, as EY's Managing Partner Jan Brorhilker suggests that at least 70,000 additional jobs could be lost in the industrial sector by the end of the year. Companies, particularly in machinery and automotive manufacturing, have initiated cost-cutting programs to adapt to the challenging market conditions.

The automotive sector, facing a decline in sales, increased competition from China, and the transition to electric mobility, has seen nearly six percent of its workforce disappear within a year. The employment level in this sector has dropped to roughly 734,000 employees by the end of March. Other industries, such as metal production and textiles, have also experienced significant employment losses, each with a reduction of over four percent. In contrast, the chemical and pharmaceutical sectors have shown relative stability, with only a minor decline of 0.3 percent.

The German Association of the Automotive Industry (VDA) has urged the government to take action, highlighting the erosion of Germany's competitiveness as a business location. VDA President Hildegard Müller emphasized that enhancing competitiveness and attractiveness for businesses should be a primary focus for the new federal government.

While there are concerns about deindustrialization in Germany, it is noteworthy that industrial employment has seen growth in a long-term context. According to the Federal Statistical Office, employment in the sector was 3.5 percent or 185,000 positions higher at the end of 2024 compared to 2014.

This analysis by EY focuses on companies with a minimum of 50 employees and utilizes data from the monthly reports on the manufacturing sector made available by the Federal Statistical Office through the Genesis Online database. Export statistics are also derived from the external trade statistics, which are accessible online.