Stagnation in the automotive sector: Giant company lays off 13 thousand people

Economic stagnation in Germany is causing companies to take more cautious steps in their workforce planning. The Employment Barometer for November, published by the ifo Institute for Economic Research, has revealed the weakness of the labor market in Germany. The barometer fell to 92.5 points in November from 93.5 points in October, reaching its lowest level since the COVID-19 pandemic.

According to the ifo's statement, companies in Germany are adopting a more restrictive stance in their personnel planning. A lack of orders and ongoing economic stagnation are driving the industrial sector toward layoffs. This trend has been continuing for the last three years, and industrial companies are unable to avoid this situation.

The service sector is also acting more cautiously in its personnel planning. Despite the approaching New Year shopping season, retail companies are planning to hire fewer staff. In the construction sector, labor demand showed a slight increase, and the barometer reached its highest level since May 2022.

Klaus Wohlrabe, Deputy Director of the ifo Center for Macroeconomics and Surveys, stated that many companies are continuing with layoffs, noting that the labor market continues its weak trend due to economic stagnation.

Germany's large companies are entering a restructuring process due to challenging economic conditions and competition from China. Rising energy costs and the decline in external demand in an export-dependent economy are forcing companies to maintain their profitability through layoffs.

In this context, Bosch, one of the world's largest automotive suppliers, announced that it would lay off 13 thousand people by 2030. While companies that form the backbone of Germany's economy are trying to ensure stability with such decisions, it is projected that economic growth in the country will remain weak.

News Source: 12punto