German businesses are increasingly factoring in leaner staffing models, according to a recent survey released Friday by the Ifo Institute. The institute’s “Employment Barometer” a key indicator of hiring expectations, decreased to 92.5 points in September, down from 93.8 points in August. This marks the lowest reading since June 2020.
“Sentiment in the labor market remains cautious” stated Klaus Wohlrabe, head of Ifo surveys. “Due to the currently absent economic upswing, many companies are holding back in personnel-related decisions.
While the reduction in staffing is occurring gradually, it’s primarily characterized by vacancies not being filled rather than widespread layoffs. The institute reports that significant waves of job cuts are not presently observed.
The decline is uneven across sectors. While the industrial sector saw only a slight decrease, vehicle and mechanical engineering firms are particularly planning for reduced staffing levels. Service providers experienced a more noticeable downward trend. Companies in the transport and logistics sectors have announced some job reductions. Construction remains relatively stable, with minimal movement in staffing numbers. Conversely, the retail sector is demonstrably reducing its workforce.