One in three German companies plans job cuts in 2025

More than a third of German companies plan to slash jobs in 2025, according to Reuters experts who reviewed a study by the German Economic Institute (IW). The report follows alarming new data showing unemployment in Europe’s largest economy has climbed toward three million, a level not seen in ten years.

The survey, which polled over 2,000 companies, reveals a mixed picture across sectors. While service industries are showing tentative signs of stabilization, manufacturing and construction firms remain particularly pessimistic about future prospects. The research had been conducted before the latest round of US import tariffs came into force.

Reuters reports that President Donald Trump's trade policies could push Germany's economy into recession for a third consecutive year.

The situation has been challenging since fall 2023, when the survey recorded more pessimists than optimists. By the end of 2024, business confidence had fallen to its lowest level since the 2008 global financial crisis, according to the report.