German companies plan significant workforce reductions

Approximately one-third of companies in Germany are planning staff reductions this year, with the industrial sector seeing even higher rates. According to data from the German Institute for Economic Research, about every third company in the country expects to reduce personnel by 2026.

Business consultant Diana Walther warns that many small and medium-sized enterprises (Mittelstand) are approaching layoffs incorrectly by focusing on personnel lists rather than evaluating their business models. She notes that structural surpluses often occur because organizational hierarchies and departments grew during prosperous years and remain fixed even when revenue declines.

The trend is also affecting higher management levels, as seen in regional job centers where former executives are facing the reality of unemployment and the loss of previous professional standards.