European firms cut jobs amid economic slowdown, rising Chinese competition

By Bahattin Gonultas and Emir Yildirim

BERLIN (AA) - European companies are laying off workers or freezing hiring in restructuring efforts to reduce costs, as the bloc’s economy weakens and competition ramps up, especially from China.

Rising Chinese competition, the ongoing war in Ukraine, tariff-induced uncertainties, and waning demand due to a weakening economy are driving companies across Europe to implement cost-cutting measures.

Massive waves of layoffs are impacting many sectors, from pharmaceuticals to technology, engineering to aviation, and even banking.

Once-stable transatlantic trade relations are also under strain, with lingering effects from US President Donald Trump’s tariff policies continuing to impact European industry.

Layoffs have become increasingly widespread across the region. The latest example comes from Danish pharmaceutical giant Novo Nordisk, which laid off 9,000 employees -- 5,000 of them based at its Denmark headquarters.

More and more layoffs are happening across the region. Germany, Europe’s largest economy, is particularly under scrutiny amid a surge in auto industry layoffs.

Around 51,500 workers in Germany lost their jobs in the country’s auto industry this year, according to a study by the consulting firm EY, making up 6.7% of the entire sector’s workforce and almost half of the 114,000 manufacturing jobs in the same period.

Challenging economic conditions and mounting Chinese competition are pushing German firms to restructure, freeze hiring, or pay off workers. Trade disputes and weak domestic demand are also contributing to the drive to reduce costs.

Germany’s industrial sector has been shedding jobs continuously since the COVID-19 pandemic. Almost no industrial firm in the country has escaped the trend.

Several major European automakers have announced significant layoffs this year. Bosch, a major auto supplier, announced on July 22 that it will dismiss 1,100 workers by 2029.

Last year, Bosch announced that it would lay off 5,500 employees worldwide from its auto division, including 3,800 in Germany.

Daimler Truck declared on July 8 that it plans to lay off approximately 5,000 workers in Germany by 2030, as well as 2,000 workers in the US and Mexico.

Stellantis, the world's third-largest automaker, said on June 10 that it will lay off 2,500 workers in Italy this year.

Luxury carmaker Porsche plans to lay off 3,900 workers and negotiate with unions in the second half of the year for further layoffs.

Continental, a German tire and auto parts manufacturer, announced on Feb. 18 that it will cut 3,000 jobs in its research and development division by the end of 2025.

French firm Renault said it will lay off 300 workers at its van factory in northern France due to slowing demand, according to a statement on March 11.

Swedish carmaker Volvo said on May 26 that it will cut around 3,000 workers as part of a restructuring plan.

In the banking sector, Germany’s Commerzbank announced it will lay off 3,900 workers, mostly in the country, by 2028.

Spain’s Banco Santander’s UK arm, Santander UK, said on March 10 that new branch closures in the UK could translate to around 750 workers being laid off.

Deutsche Bank has decided to cut 2,000 more employees this year, following the layoff of 3,500 support staff members last year, according to a statement released on March 20.

UK-based HSBC plans to lay off 348 workers in France as part of a voluntary redundancy program, the bank announced on May 14.

London-based Lloyds Bank is preparing to cut 1,600 workers as part of a shift towards digital banking services and to reduce costs.

Austrian energy firm OMV plans to lay off 2,000 employees, while German energy firm Uniper will be cutting 400 jobs.

STMicroelectronics, a French-Italian chipmaker, said on June 4 it will lay off 5,000 workers over the next three years.

Siemens, a German engineering firm, has decided to lay off over 6,000 employees by 2027, the majority of whom work in the automation sector.

German firm ThyssenKrupp said on March 6 that it will freeze hiring and lay off 1,800 workers in its auto division due to challenging market conditions.

In the retail sector, French supermarket chain Auchan announced it will lay off 710 workers in Spain and close 25 stores, according to a statement on May 8.

German sportswear brand Puma said on March 12 that it will lay off 500 workers worldwide to cut costs.

Tesco, the UK’s largest supermarket group, will lay off around 400 workers from its stores and headquarters to cut spending, while Sainsbury’s said in January that it will lay off over 3,000 workers.

Burberry, the British luxury fashion brand, said on May 14 that it would lay off 1,700 workers.

In various European sectors, German media firm ProSiebenSat.1 said it will lay off 430 full-time workers in a bid for digital transformation, while food delivery firm Just Eat will lay off 2,000 workers by the end of the year.

Shipper DHL, a subsidiary of Germany’s Deutsche Post, said on March 6 that it will lay off around 8,000 workers in the country to reduce costs as profits decline.

German biotechnology firm BioNTech plans to lay off around 950 to 1,350 full-time workers by 2027, according to a statement on March 10.