Within just twelve months, carmakers and suppliers cut around 51,500 positions – nearly seven percent of their workforce. Experts stress that no other sector has faced such a dramatic decline.
The ongoing economic crisis continues to drive losses across the industrial landscape. An analysis by consulting firm EY, shared with the German Press Agency (dpa), shows that the number of employees in the automotive sector fell by a net 51,500 in the past year, more than in any other industry.
As of June 30, total industrial employment stood at 5.42 million people – a 2.1 percent drop compared to the same period last year. According to the study, based on data from the Federal Statistical Office, roughly 114,000 jobs were lost within a year. Compared to the pre-COVID year of 2019, employment has shrunk by around 245,000, or 4.3 percent.
Revenues are also under pressure. In the second quarter, overall industrial turnover fell by 2.1 percent – marking the eighth consecutive quarterly decline. Except for the electrical engineering sector, all industries reported losses. For carmakers, already struggling with weak sales, rising competition from China, and the costly transition to electric vehicles, revenues dropped by 1.6 percent.
Germany’s industrial decline is not only driven by high energy costs, bureaucracy, and sluggish domestic demand, but also by global trade tensions. “The sharp fall in exports to the United States has hit German industry particularly hard,” said Jan Brorhilker, Managing Partner at EY.
Tariffs imposed by former U.S. President Donald Trump continue to make German products more expensive in the American market, even though the European Union has since negotiated lower auto tariffs. At the same time, exports to China have also fallen, as German manufacturers face intensifying competition from Asian rivals.
This pressure has already led to drastic measures. Major manufacturers such as Mercedes-Benz and Volkswagen, along with suppliers like Bosch, Continental, and ZF, have announced cost-cutting programs. Porsche, meanwhile, is preparing to shut down most operations at its battery subsidiary Cellforce. “Massive profit slumps, overcapacity, and weakening foreign markets make significant job cuts unavoidable – especially in Germany, where central management, administrative, and research functions are located,” Brorhilker explained.
Other industries are also affected, though to a lesser extent. Mechanical engineering shed more than 17,000 jobs within a year, while metal production lost about 12,000. In contrast, job losses in the chemical and pharmaceutical sectors were comparatively minor.
The crisis has sparked a heated debate over Germany’s future as an industrial hub. Some critics already warn of “deindustrialization.” Yet, a longer-term perspective tells a more nuanced story: according to the Federal Statistical Office, industrial employment at the end of 2024 was still 3.5 percent – or about 185,000 jobs – higher than a decade earlier.
Nevertheless, the outlook for young professionals is increasingly uncertain. “The automotive industry and mechanical engineering are hiring far fewer young people today than in previous years,” Brorhilker noted. For engineers in particular, the job market is becoming more challenging. Many university graduates may be forced to rethink their career paths. “We will see rising unemployment among university graduates – something Germany has not experienced for a very long time.”
With information from dpa.
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