DAX crisis: profits are melting, jobs are disappearing – what awaits us?

DAX crisis: profits are melting, jobs are disappearing – what awaits us?

The DAX companies will face significant challenges in 2025. According to a recent analysis by EY, companies are reporting a sharp decline in their operating profits as economic uncertainty and international competition continue to increase. In the first three months of 2025, total sales of non-bank DAX companies rose by a moderate 3.3 percent to 458.9 billion euros, but ten companies, including well-known brands such as BMW, Mercedes-Benz, BASF and Bayer, recorded declines in sales.

Particularly worrying is the decline in operating profit (EBIT), which fell by 8.1 percent to 44.8 billion euros, compared to 48.7 billion euros in the previous year. This affects 16 DAX companies, including all automobile manufacturers as well as Hannover Re and Munich Re. In this context, Henrik Ahlers from EY points out that many DAX companies are showing remarkable resilience despite the difficult conditions.

Export machine under pressure

The export-heavy industry faces significant challenges due to uncertainties, particularly regarding US tariffs. The DAX car manufacturers suffered a 2.5 percent decline in sales in the first quarter and struggled with a drastic 42 percent decline in profits. Meanwhile, some companies such as Rheinmetall and MTU Aero Engines recorded significant sales increases - 46 percent and 28 percent, respectively, compared to the previous year.

Employment at DAX companies fell by 1 percent, which corresponds to a reduction of around 32,000 jobs. Jobs were cut at 27 DAX companies and the number of employees fell to 3.17 million. According to experts, a realistic picture of the current situation is not expected until the second half of the year, when the first effects of US tariffs become noticeable.

Highest profits in the quarter

Despite the difficulties, there were also bright spots: Deutsche Telekom achieved the highest operating profit in the first quarter at 6.8 billion euros, followed by Allianz with 4.2 billion euros and Siemens with 3.1 billion euros. In contrast, Porsche Holding was the only DAX company to report an operating loss. The latest developments are a reflection of the weak economy, geopolitical risks and increasing international competition, all of which are putting pressure on companies.

The new financial measures to be introduced by the black-red federal government are raising hopes of a potential growth spurt. To counteract the challenges, many DAX companies are relying on cost-cutting measures and efficiency programs.

This complex situation will certainly shape the strategic decisions of DAX companies in the coming months, while demand remains burdened by geopolitical uncertainties and economic fluctuations. Developments will be closely monitored to understand the impact on the balance sheets and market position of these important companies.

For more details about the current situation of the DAX companies, you can read the reports from T Online and EY be consulted.