LIST/ The German economy is on the verge of recession, here are the companies that will lay off thousands of workers

The German economy is on the brink of recession again this year - industry is particularly affected by the crisis. Pessimism dominates in the largest companies. "They are suffering the most because of the decline in Germany's ability to compete on the world market," believes Ulrich Kater, chief economist of Dekabanka.

The weakness of the German economy has very concrete consequences. "The industrial crisis and the long-term economic decline are leaving their mark on the labor market," says Enzo Weber from the Institute for Labor Market Research (IAB). According to researchers' estimates, unemployment is expected to continue to rise. Until spring, they say, in Germany "no change in trend is expected".

Several large German companies have announced mass layoffs in recent weeks and months. These are the affected companies.

The Schaeffler company, which makes parts for the automotive industry, has announced layoffs and factory closings. Due to ongoing problems in the industrial sector and weak demand in the automotive market, Schaeffler plans to cut a total of 4,700 jobs, of which 2,800 are in Germany. Also, a factory in Austria and Great Britain will be closed. The company also announced the suspension of production of some products in Berndorf, Austria, as well as the end of some production in Sheffield, England.

Auto supplier Continental also plans mass layoffs due to weaker sales at BMW, Mercedes and other concerns, as well as problems in the electric car sector.

According to the company, by mid-2023, 5,000 jobs in development, production and administration have already been eliminated. By 2028, they plan to cut a total of 7,150 jobs, of which more than a third belong to Germany.

The largest German car manufacturer (Volkswagen, which includes the brands VW, Audi, Porsche, Seat, Skoda, Cupra, Lamborghini, Bentley and Ducati) is facing a serious crisis. According to union representatives, three VW factories are currently at risk, while tens of thousands of jobs are at risk from the cuts. The company lacks buyers for more than 500,000 vehicles, said Dirk Große-Loheide, member of the board of directors of the VW brand. "If there is no demand, we must adapt the production capacities to the current situation", he added.

Even Volkswagen brand director Thomas Schäfer stressed that current measures, such as early retirement, short-time work and other cuts, are not enough to cut costs. Negotiations are currently underway with the IG Metall union, but no agreement has been reached so far. Negotiations will continue on December 9, but for now tens of thousands of jobs are expected to be cut.

Bosch, another major auto parts supplier, plans to cut up to 5,550 jobs - 3,800 of them in Germany. The exact figures will be determined in negotiations with the workers' representatives. Particularly affected is the Cross-Domain Computing Solutions sector, which deals with the development of systems for assistance in driving and autonomous driving.

Bosch plans to introduce reduced working hours for many employees in Germany, which will also result in lower wages. In total, around 10,000 workers at nine locations in Germany will be affected. The company cites the crisis in the automotive industry and weaker demand as reasons, while results in the sector of new technologies, such as automated driving, are below previous expectations.

Auto parts supplier ZF Friedrichshafen plans to cut up to 14,000 of its 54,000 jobs in Germany. In Saarbrücken alone, 1,800 workers will be laid off by the end of 2025. If the difficult situation with orders continues, a total of 4,500 jobs could be cut by the end of 2028. The company also does not rule out the possibility of closing any factory.

ZF also has problems with large debts due to large acquisitions (takeover/acquisition of companies), while sales results are much lower than expected. "According to the latest data, at the end of the year we will lack three billion euros in income," said the chairman of the Workers' Council, Achim Dietrich. In addition, large debts come as a result of the acquisitions of other corporations.

American carmaker Ford plans to cut 2,900 jobs in Germany by 2027, most of them at the Cologne plant. In total, around 4,000 jobs will be cut in Europe. Although the company invested two billion euros during 2023 and 2024 in the modernization of the factory in Cologne, for the production of electric vehicles, sales expectations were not met.

Germany's largest steelmaker Thyssenkrupp Steel plans to cut around 11,000 jobs over the next six years. By the end of 2030, the number of employees will fall from 27,000 to 16,000. The company aims to reduce production capacity and increase investments in environmentally friendly technologies, which require billions of investments. In addition, the import of cheap steel from Asia and the crisis in the automobile industry present a major challenge.

In 2022, BASF has announced a savings program due to rising gas prices and difficult business conditions in Europe. An additional austerity plan was introduced earlier this year, including job cuts in Ludwigshafen. By 2026, BASF plans to cut costs by one billion euros per year. By the end of 2024, the company will cut 3,300 jobs globally, including 2,500 in Ludwigshafen.

Also announced were the closures of three factories in Ludwigshafen, including the production of adipic acid - a key ingredient for plastics. These measures, although understandable in the current economic situation, will leave thousands of workers without work and will further worsen the situation in the labor market./ DW