Significant increase in corporate insolvencies in Germany - over 200,000 jobs threatened

Significant increase in corporate insolvencies in Germany - over 200,000 jobs threatened

According to a report by www.tichyseinblick.de, the number of regular insolvencies filed in Germany continued to rise sharply in November. An estimated 205,000 jobs are threatened or have already been lost. The number of regular insolvencies filed increased by 18.8 percent compared to the same month last year. This is the second month in a row in which double-digit growth rates have been observed compared to the previous year.

The increase in bankruptcies filed is particularly notable in the construction industry, where the number of bankruptcies of property developers and property developers has quadrupled since 2022. The bankruptcies of large traditional companies also put a strain on the market, as these companies employ two thirds of the total number of employees affected by bankruptcies.

According to experts, the causes of the bankruptcies are mainly due to high interest rates, a weak economy and expensive energy. The increase in the “CO2 price” from 2024 will bring further burdens for companies. Sectors such as hospitals, mechanical engineering, textile companies and fashion retailers are particularly affected.

The impact on the market is already being felt, as shown by the announcement by auto supplier Bosch, which plans to cut up to 1,500 jobs. This is partly due to the transformation of the automotive industry towards electromobility. The measures are to be implemented by the end of 2025, and discussions with the works council are already underway. The development of insolvencies in Germany points to ongoing problems in the financial sector and on the labor market, particularly in traditional industries.

The increased number of bankruptcies is likely to continue to place a burden on the German economy, particularly in view of the current economic challenges and the ongoing structural change in industry. It is expected that the government and the financial sector will have to take measures to mitigate the negative impact on the labor market and the economy.