Mass layoffs loom for German industry amid mounting economic slowdown

Germany’s economic powerhouse, the automotive sector, is expected to lose up to 140,000 jobs by 2035 as challenging economic conditions, weak demand across various product segments, and fierce competition from China forced German companies to restructure, freeze hiring, or lay off workers, according to the Prognos Institute.

As Europe’s largest economy grapples with soaring energy costs and a sharp drop in external demand — a critical issue for export-dependent Germany — companies forming the backbone of the economy are struggling to withstand strong macroeconomic headwinds. After two consecutive years of economic contraction, the country is bracing for another year of sluggish growth.

Besides intense global competition and persistent weak demand, political instability is further weighing on the German economy, pushing more companies toward restructuring and workforce reductions.

According to a survey by the Cologne Institute for Economic Research (IW Koln), only 17% of German companies plan to hire more staff in 2025, while 38% are considering job cuts. Among industrial firms, 44% are looking to reduce their workforce, while just 14% plan new hires.

The automotive sector alone saw 46,000 job losses between 2019 and 2023, according to official figures.

Major layoffs from the German industry’s driving forces

Mass layoff announcements have become increasingly common in Germany, affecting sectors including automotive, manufacturing, engineering, technology, telecommunications, and finance.

Several of the country’s industrial giants—including Volkswagen, Thyssenkrupp, DHL, Commerzbank, Deutsche Bank, Audi, Deutsche Bahn, and Siemens—have implemented major cost-cutting measures because of rising expenses and declining profitability.

Since late 2023, some of the most notable announcements include:

• Audi, the luxury brand of the Volkswagen Group, announced on Mar. 17 that it will cut approximately 7,500 jobs in Germany by 2029.
• Volkswagen launched a cost reduction program in December 2024, targeting 35,000. The company reportedly plans to cut 1,600 positions in its software unit, Cariad, by the end of 2025.

• Porsche, another luxury arm of Volkswagen, is preparing to lay off 3,900 employees and is expected to enter further negotiations with unions for additional reductions in the second half of 2025.
• Thyssenkrupp, a major steel and technology group, announced in November 2024 that it would eliminate 5,000 jobs in its steel division by 2030, with an additional 6,000 cuts through outsourcing or divestitures. In March 2025, the company also announced it would freeze hiring and cut 1,800 jobs in its automotive division.
• Schaeffler, an automotive and industrial supplier, said in November 2023 that it would cut 4,700 jobs across Europe — 2,800 of them in Germany — due to weak demand from carmakers.

• Continental, a manufacturer of tires and auto parts, plans to cut 3,000 jobs in its R&D department by the end of 2026.
• Bosch, a key automotive supplier, announced in November 2024 that it would lay off 5,500 employees globally — 3,800 of them in Germany — and introduce reduced working hours in its production facilities.
• Mercedes-Benz, while remaining cautious on layoffs, disclosed in November 2024 that it plans to cut several billion euros in annual costs in the coming years, potentially affecting headcount.
• Commerzbank, Germany’s second-largest bank, announced in February 2025 that it would eliminate 3,900 jobs, mostly within Germany, by 2028.

• Puma, the German sportswear giant, revealed in March 2025 that it would cut 500 jobs globally as part of a cost-reduction initiative.
• BioNTech, the biotech firm behind one of the leading COVID-19 vaccines, announced plans on March 10 to reduce its workforce by 950 to 1,350 full-time positions by 2027.
• DHL, the logistics arm of Deutsche Post, stated on March 6 that it aims to cut 8,000 jobs in Germany in 2025 due to declining profits.
• Deutsche Bank, after eliminating 3,500 support roles in 2024, announced on March 20 that it would cut an additional 2,000 jobs in 2025.
• Siemens, a leading German engineering firm, plans to cut more than 6,000 jobs globally by 2027, particularly in its automation division.