Four of ten German companies plan to reduce their workforce in the new year. This is evident from a survey of the employers’ association of the German economy (IW) of more than 2,000 companies, which the “Handelsblatt” (Thursday edition) reports. According to the IW, 38% of the companies plan to reduce their staff.
The companies cite the gloomy economic situation as the reason. So, 40% of the surveyed companies expect worse business prospects in the next year, only one-fifth is optimistic about the new year. As a result, only 23% of all surveyed companies plan to invest more in 2025, while 40% expect a decline in their investments.
According to the institute, only during the 2008 financial crisis was the pessimism greater. Therefore, “no signals for a turn in the German economy can be derived from the survey”, the IW analysis states. Instead, the German economy will “continue to stagnate economically”.
As a result, the crisis is now also affecting the labor market. “The employment growth in Germany, which has been ongoing since 2005, is at an end”, the IW analysis states. The industry is particularly affected.
“The pace of deindustrialization on the labor market has accelerated significantly”, warned the Düsseldorf economist Jens Südekum. Stefan Kooths, the chief economist of the Kiel Institute for World Affairs (IfW), explained that in the industry, people are no longer talking about a recession, but about a structural crisis. As a result, “permanent job losses” are occurring.