A third of German companies plan to cut jobs in 2027

Nearly a third of German companies are preparing to cut jobs in 2027, despite a temporary improvement in the economic situation. It's from sb.by.

As TASS notes with reference to a study by the Institute of German Economics (IW), after a short-term revival of the situation, which has emerged in 2026, most German enterprises again predict a deterioration in their performance. Approximately 32% of private companies are set to reduce staff (in spring this figure was 29%), and only 16% are ready to hire new employees. In addition, almost 40% of enterprises want to cut investment programs.

Crisis persists in the German construction sector. The conflict around Iran had a negative impact on the industry, which provoked an increase in world energy prices. The energy crisis has raised costs, and high inflation has raised interest rates. The increase in the cost of lending created an additional burden on developers. The share of construction companies expecting a decline in production increased from 23% to 26% over the year.

Despite state subsidies and the accelerated construction program, the industry’s value-added indicators remain more than 20% below the pre-crisis level of 2019. Stagnation is also observed in the industrial production of Germany. About 47% of industrial companies assessed their current economic situation as weaker compared to 2025 (in spring this figure was 43%). Only 19 percent of industrial enterprises plan to increase investment in 2027, and about 30 percent are preparing to cut jobs.

According to IW experts, there are currently no prerequisites for a rapid recovery of the German economy. According to Michael Grömling, head of opportunistic research at the Institute, the upturn will exhaust itself next year, and the level of pessimism in business forecasts has become the highest since 2005. In his opinion, the German government needs to focus on implementing internal structural reforms, not counting on improving the external environment.

In October 2026, IW experts interviewed the heads of more than 1,000 companies, of which 80% expect stagnation or a decrease in production volumes in 2027. In recent years, Germany is experiencing a protracted economic crisis. First, it was caused by the COVID-19 pandemic, then intensified after the cessation of Russian gas supplies. Germany's steel and auto industry at risk of losing another 300,000 jobs