Sunday 02/November/2025 – 11:51 PM
A recent economic study by the German Economic Institute in Cologne showed that Germany is facing a new jobs crisis, as about a third of German companies plan to reduce the number of their employees during the next year 2026, according to the German newspaper Bild.
Reducing employment
According to the survey results, 36 percent of the participating companies intend to lay off employees, while only 18 percent plan to hire new workers.
The results indicate that the short economic recovery that the country witnessed in the spring of 2025 has ended, and that the general economic mood has returned to decline.
The newspaper pointed out that the situation appears bleaker in the industrial sector, as 41 percent of industrial companies announced their intention to cut jobs, while only one company out of every seven companies plans to create new job opportunities.
The study also issued a warning about a decline in investments, as only 23 percent of participants said that they intend to increase spending on new projects in 2026, compared to 33 percent who plan to reduce their investments, which the researchers described as an exacerbation of the investment crisis in Germany.
The institute noted that continued stagnation in investment expectations for five consecutive quarters has not been recorded since the start of these studies.
The results showed clear regional variation; In the north of the country and Bavaria, cautious optimism prevails, while pessimism prevails in the rest of the regions, especially northeastern Germany, where about half of the companies expect a decline in production, while only 17 percent believe that their performance will improve.
IW economist Michael Grimling said that companies are suffering from great geopolitical pressures, warning that the absence of government reforms will make it difficult for exceptional programs worth billions of euros to achieve the desired impact or stimulate the desired growth.
