Agency Report –
More than a third of German businesses expect to cut jobs this year, a survey revealed on Friday.
The German Economic Institute’s study found that 35% of firms believe they will reduce personnel, while only 24% are planning to hire more employees.
The survey of some 2,000 companies was carried out between March and April 2025, as Germany’s export-based economy faces the threat of US President Donald Trump’s aggressive tariff policy.
The results were more positive than those found in the previous survey in the autumn, when 38% of businesses predicted they would cut positions and only 17% were forecasting a bump in hiring.
Friday’s study found that companies in the industrial sector were more pessimistic than those in services, with 42% expecting to reduce personnel compared to 21%.
“German industry continues to suffer from geopolitical conflicts and the correspondingly weak global economy,” the study stated. “The uncertainties of the new US government are exacerbating this.”
High energy, regulatory and labour costs are also weakening competitiveness and thus German companies’ international business, the study argued.
While US duties of 10% on all imports, with additional levies on cars, aluminium and steel, were not in force during the survey period, the survey said that “the export climate was already poisoned” ahead of Trump’s announcements.
“The tariff war is putting an enormous strain on day-to-day business,” said the Cologne-based institute’s director, Michael Grömling. “Donald Trump’s whims come at an inopportune time and are a severe test for the German economy.”
