Germany faces record corporate bankruptcies and massive job cuts

A study by the Leibniz Institute for Economic Research (IWH) shows that corporate bankruptcies in Germany jumped 80 % in June compared with the pre‑pandemic average for the same month, reaching the highest level of the past twenty years. The surge concerns personal and joint‑stock companies and does not count sole‑traders or very small firms.

Analysts warn that the fallout could trigger up to 100,000 job losses at Volkswagen, 14,000 at parts supplier ZF and more than 20,000 at Bosch in Germany, with an additional 100,000 jobs at risk across the broader industrial, mechanical engineering and construction sectors. Some observers point to a “creative destruction” effect: the Federal Statistics Office recorded a 10 % rise in new business formations in the first quarter of 2026, partly in AI‑related fields.

The situation is set against a backdrop of stagnant growth, with forecasts for 2026 barely above 0.5 % and continued pressure on the German economy’s export‑driven model.