Employment Crisis in Germany: Lowest Level of 2020

The Employment Situation in Germany is Worrying

The economic stagnation in Germany is leading companies to be cautious in hiring new employees by the end of the year, while layoffs continue unabated.

Decline in the Ifo Employment Barometer

According to the results of the Employment Barometer for December published by the German Economic Research Institute (Ifo), the barometer declined from 92.5 points in November to 91.9 points in December, reaching its lowest level since May 2020.

Cautious Behavior of Companies

The Ifo statement noted, "Companies in Germany are approaching new personnel recruitment more cautiously, and most are also laying off employees." A trend of decreasing personnel numbers is observed in nearly all sectors, with clothing manufacturers being the most cautious group in new hiring.

Sectoral Analysis

The service sector is also cautious about new hiring, and the barometer in this area has shown another decline. In the retail sector, companies plan to employ fewer people in the new year. In the construction sector, the situation is mixed; some positive and negative expectations are balanced.

Evaluation from Klaus Wohlrabe of Ifo

Klaus Wohlrabe, Director of the Ifo Center for Macroeconomics and Surveys, stated, "By 2025, gradual layoffs, especially in the industrial sector, are expected. Weak economic conditions continue to slow down the labor market."

Decline in Employment for Three Consecutive Years

In the country, insufficient orders and economic stagnation are increasingly negatively impacting the industry. The layoff rates in the automotive, industry, technology, telecommunications, and finance sectors have become more pronounced. Difficult economic conditions, weak demand for many products, and intense competition from China are pushing German companies towards restructuring.

The attempt of companies to maintain profitability through layoffs is creating significant concern among Germans.