Experts are sounding the alarm: there is a threat of mass layoffs in Germany!

Experts are sounding the alarm: there is a threat of mass layoffs in Germany!

Experts are urgently warning of the threat of massive layoffs in Germany as the country continues to lack economic momentum. Economics professor Lars P. Feld commented on this in the “Handelsblatt” and criticized the new federal government for the lack of economically relevant decisions so far. The end of the debt brake alone is not enough, because the government is required to tackle more ambitious measures instead of dealing with less implementable aspects of the coalition agreement, such as the mother's pension.

Feld, who heads the Walter Eucken Institute, fears that the stagnation that has characterized the German economy over the past three years will now have a noticeable impact on the labor market. He expects significant layoffs in the second half of 2023 due to high energy costs, labor costs and strict regulation. The wave of layoffs has already begun at large companies such as Volkswagen and ThyssenKrupp, which, according to Feld, could continue.

Global crises are making the situation worse

The challenges for the German economy are diverse. In addition to internal pressure from rising labor and energy costs, external factors such as Trump's customs policy and the geopolitical situation in China are also putting a strain on the country's economic stability. Economist Carsten Brzeski from ING Bank shares Feld's concerns and emphasizes the need for quick government action. Many companies are waiting for clear signals as unemployment numbers continue to rise.

A worrying report from the Ifo Institute in Munich shows that employers' willingness to hire people is decreasing. The Federal Employment Agency already reported an increase in the number of unemployed to 2.47 million in July 2022, partly due to the registration of Ukrainian refugees. This is the background against which employers are increasingly planning job cuts; A survey by the Family Business Foundation showed that one in four German companies is affected.

Job loss and insecurities

The energy crisis is forcing companies to look at savings as gas prices rise. This situation is forcing many employees to worry about their jobs and increasing the feeling of insecurity in the labor market. The German Economic Institute predicts that around 307,000 employees could lose their jobs in 2023 due to high gas prices.

In addition, companies such as McMakler, Klarna and Gorillas report that layoffs have already been carried out. Economist Holger Schäfer speaks of a strategy of “hoarding labor” in order to retain qualified staff, while 83 percent of those surveyed in ARD-DeutschlandTrend say they fear job losses due to the energy crisis. The President of the Confederation of German Employers' Associations is now warning of a relapse in international competition.

Nevertheless, the demand for qualified specialists remains, while companies use “crisis-proof” job advertisements to attract suitable employees. However, the future development of the labor market and gas prices remains uncertain and is a source of constant concern for many.

Overall, these developments highlight the urgent need to take proactive and comprehensive measures to stabilize the economic situation in Germany and prevent the threat of mass unemployment. So reported Picture about the critical situation in the German labor market, while Work ABC the increasing fears and forecast developments.