Companies in Germany continue to cut staff amid sluggish economy: Report

By Bahattin Gonultas and Mucahithan Avcioglu

BERLIN / ISTANBUL (AA) - German companies continue to cut jobs in the face of a weak order situation and a sluggish economy, according to research company Ifo Institute's Employment Barometer on Thursday.

Ifo's Employment Barometer in Germany, which was 93 points in February, decreased to 92.7 points this month.

The effects of the lack of orders and the ongoing economic crisis on industry are becoming increasingly evident.

"Industry in particular is constantly shedding jobs. This trend has been going on now for almost two years, with hardly any industrial company being spared," it said in a statement.

Service providers are also becoming more cautious in their staff planning, the employment barometer in retail has risen, but many retailers are still planning to reduce staff.

According to the statement, the construction sector is not planning any major changes for the time being.

“The situation on the labor market remains difficult,” said Klaus Wohlrabe, the head of surveys at ifo. “Unemployment will probably continue to rise slightly.”

- Big companies plan big layoffs

Tough economic conditions, persistently weak demand for many products and fierce competition from China are forcing German companies to restructure, freeze hiring or cut jobs.

As German companies try to stabilize their declining profits with layoffs, successive reports of “layoffs” or “hiring freezes” are causing concern among Germans.

Companies that form the backbone of Germany, Europe's largest economy, are struggling to cope with harsh macroeconomic headwinds due to rising energy prices and a decline in foreign demand, a particular problem for the export-dependent German economy, as the country prepares for another year of weak economic growth after two consecutive years of recession.

Layoffs in the automotive, industrial and engineering, technology, telecommunications, finance and other sectors are being carried out every day.

Most recently, the German engineering company Siemens has decided to lay off more than 6,000 employees by 2027, mainly in the field of automation.

Audi, the luxury car brand of the German carmaker Volkswagen Group, announced on March 17 that around 7,500 people will be laid off in Germany until 2029.

Audi's parent company, Volkswagen, has also launched a cost-cutting program that includes the layoff of 35,000 people.

German steelmaker and technology firm ThyssenKrupp announced on Nov. 25 that it plans to cut 5,000 jobs in its steel unit by 2030, plus another 6,000 through the sale or transfer of business operations to external service providers.

ThyssenKrupp also announced on March 6 that it would freeze hiring and plan to cut 1,800 jobs in its automotive division, citing persistently challenging market conditions in the global automotive industry.