German Automotive Industry Faces Deep Cuts: 51,000 Jobs Lost in Recent Wave
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Analysis from EY consulting reveals a significant downturn in the german automotive sector, with job losses outpacing all other industries. The situation is fueled by a confluence of factors, including energy costs, trade tensions, and shifting global markets.
The Scale of the Layoffs
A recent analysis by EY, based on data from the Federal Statistical Office in Germany, indicates that approximately 51,000 jobs have been eliminated within the automotive industry. This represents nearly 7 percent of the total job losses across all sectors in germany. As Deutsche Welle (DW) reports, “No other industry has liquidated so many jobs”.
The overall employment figures for all industries at the end of June showed a 2.1 percent decrease year-over-year, totaling 5.42 million employees. This translates too a loss of roughly 114,000 jobs over the past 12 months.Looking further back, employment is down 4.3 percent, or approximately 245,000 jobs, compared to 2019 levels.
Multiple Pressures Converge
The German automotive industry is grappling with a complex set of challenges. Beyond the immediate job cuts, the sector is facing headwinds from expensive energy, bureaucratic hurdles, and sluggish domestic demand. Though, a significant contributing factor is the escalating trade dispute with the United States.
Jan Borhilker from EY, as quoted by DW, highlights the impact of the US tariffs: “German industry has recently affected a huge drop in exports to the USA.” This decline in exports, coupled with increased competition from manufacturers in China, is putting immense pressure on German automakers.
Borhilker further explains, “A huge decrease in profits, surpluses of production capacity and weakening of foreign markets make a significant reduction of employment inevitable, especially in Germany, where management, administration, research and development are located.”
Major Manufacturers Respond with Cost-Cutting Measures
In response to these pressures, leading automotive manufacturers are implementing significant cost-saving programs. Mercedes-Benz and Volkswagen have already announced restructuring plans, and key suppliers like bosch, Continental, and ZF are following suit. Even Porsche is scaling back operations, with plans to largely suspend activities at its Cellforce subsidiary, which focuses on battery production.
