A significant contraction in leadership roles across German corporations is signaling a deepening economic uncertainty and raising concerns about the future of middle management. Data from Index Research, analyzed for “Welt am Sonntag” reveal a 16% decline in advertised executive positions over the first ten months of 2024, a worrisome trend following a 20% decrease year-on-year for the entirety of 2023. This translates to a drop from over 56,000 advertised executive roles at the beginning of last year to just 45,000 currently.
Jürgen Grenz, CEO of Index Research, attributes this reluctance to fill top leadership positions to a “wait-and-see” approach common during periods of crisis. He suggests that companies are deliberately avoiding disruption at the executive level, especially given restructuring efforts already underway at lower levels. This behavior mirrors patterns observed during the 2008 financial crisis and the COVID-19 pandemic, where leadership changes typically occur “after” a period of instability has subsided.
The challenging environment extends beyond the C-suite. The number of advertised positions for middle management – including area, department, group and project leaders – has also fallen, dropping by 6% between January and October compared to the same period last year, amounting to 1.128 million roles.
Sophia von Rundstedt, an outplacement consultant, highlights the “double pressure” faced by this crucial middle management layer. They are simultaneously tasked with implementing corporate restructuring initiatives mandated by senior leadership while also being vulnerable to job cuts themselves. This precarious position is further complicated by the accelerating need for expertise in artificial intelligence. While middle managers are essential to effectively integrate AI technologies within companies, Von Rundstedt warns that the same implementation could quickly render their roles obsolete. The situation underscores a broader disconnect between corporate strategies aimed at modernization and the potential displacement of the workforce tasked with executing them, creating a potentially tense and demoralizing atmosphere within German companies.