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One-Third of German Companies Plan Job Cuts in 2025, IW Survey Reveals

Economic pressures persist as industrial firms report the highest layoff expectations, with geopolitical tensions and U.S. tariffs weighing on business sentiment.

Zwei Industriearbeiter in einer Werkshalle
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Chempark Krefeld-Uerdingen, rund 40 Betriebe sind in dem Chemiepark am Rhein angesiedelt, es gibt 3 Chemparks in NRW, Frachtschiff auf dem Rhein, Deutschland. Unternehmen bleiben skeptisch.

Overview

  • deutschen Wirtschaft (IW) survey shows 35% of German companies plan workforce reductions in 2025, while 24% anticipate new hires.
  • Industrial firms are the most pessimistic, with 42% expecting layoffs, compared to 21% in the service sector.
  • Investment outlooks have slightly improved since autumn 2024, with 35% expecting cuts (down from 40%) and 28% planning increases (up from 23%).
  • Corporate sentiment has improved from a net -33 points in late 2024 to -22 points in spring 2025, but remains negative overall.
  • Geopolitical conflicts and U.S. tariffs, described as a 'hardship' for German exporters, continue to strain competitiveness and economic stability.