One-Fifth of Companies to Cut Jobs in Q1 2025

One-Fifth of Companies to Cut Jobs in Q1 2025

According to a survey of over 800 member companies of the “Familienunternehmer” association in January, a fifth of German family-owned businesses plan to reduce their workforce in the first quarter of 2025. This is equivalent to the number of companies that existed at the height of the Corona pandemic in 2020. The survey reveals that only 16 per cent of the companies plan to make new hires, a value that is lower than during the pandemic and the lowest since the start of the quarterly survey in 2015.

The survey also shows that open positions are dwindling, with nearly 80 per cent of companies having unfilled positions in the third quarter of 2024, but now this figure has dropped to less than 60 per cent. The assessment of the current business situation and the expectations of the entrepreneurs regarding new orders also remain at a low level.

Most companies are still holding back on investments, with bureaucracy and over-regulation being the main obstacles, according to the survey. 62 per cent of the entrepreneurs see these as investment brakes. Moreover, 46 per cent of the companies complain about a lack of planning security due to the unpredictable economic and financial policy, which hinders investment readiness. One-third of the companies are even forgoing investments due to the economic downturn.

“The reduction in jobs in the Mittelstand with this quarter even reaches the sad record of the Corona pandemic time, which was also characterized by enormous uncertainty” said Marie-Christine Ostermann, the president of the Family Business Association. The situation before the federal election is simply unbearable. Germany is like a ship with machinery failure, sailing in a stormy sea, she said. “The unpredictability of economic policy must come to an end.