Germany on the brink: mass layoffs and wave of bankruptcies are looming!

Germany on the brink: mass layoffs and wave of bankruptcies are looming!

The situation on the labor market in Germany is bleak. Recent developments show a dramatic increase in corporate bankruptcies and unstoppable job losses. As the WSWS reports, the German government has invested hundreds of billions of euros in defense projects in recent years, while at the same time countless employees are losing their jobs.

Job cuts in numerous industries

We are seeing devastating numbers, especially in the automotive and supplier industries. In 2023 alone, 70,000 jobs were cut in German industry, and the forecasts remain sobering: by 2030, 500,000 jobs could be lost across the entire sector. Companies such as Volkswagen and Audi have already announced massive job cuts and plan to cut a total of 35,000 and 20,000 jobs respectively by 2030. Companies like Mercedes, BMW and Porsche are also following suit and reporting similar cuts that could seal the fate of their employees.

Bankruptcy numbers are rising rapidly

The ZDF highlights that the number of bankruptcies rose to 11,900 in the first half of 2025 - an increase of 9.4 percent compared to the previous year. The service industry, with 7,000 bankruptcies, and the retail sector, where brands such as Galeria and Gerry Weber had to close the doors, are particularly affected. The total damage caused by these bankruptcies amounts to 33.4 billion euros, meaning that 141,000 people have lost their jobs.

What does the future look like?

According to current forecasts, the unemployment rate will continue to rise in 2025 to a total of 2.92 million unemployed, an increase of 140,000 compared to the previous year. Furthermore, underemployment remains a major problem, with 3.6 million people unable to find suitable employment. This leads to a large number of people eligible for citizen's benefit, many of whom, however, have too little income to make ends meet.

Causes and outlook

The persistently weak economy is often cited as the main cause of the crisis. Martin Lück from Macro Monkey sees the current situation as historically difficult; The German economy has not weakened as much in two consecutive years as it does now in over 20 years. Enzo Weber, labor market researcher at the IAB, also emphasizes the necessary retraining and further training for employees, while at the same time the job offer continues to shrink.

The picture becomes even bleaker when we consider the response from unions, which are often criticized for their lack of support in defending jobs. Many are calling for independent action committees to fight against the impending job losses. In the current situation, this is probably urgently necessary.

Finally, it remains to be hoped that the federal government's fiscal packages will soon have an impact and that a comprehensive recovery in the labor market will be possible. In the meantime, it remains a challenging time for many, with more and more people fearing for their future. If you would like to find out more about the current situation, you can do so on the website Federal Employment Agency do.