Germany’s industry is in crisis: after the car manufacturers VW, Ford and Tesla and the car supplier Bosch, the country’s largest steel company now also wants to cut jobs. The industrial group Thyssenkrupp announced on Monday that it plans to cut 11,000 jobs in its steel division and close the Kreuztal-Eichen site near Siegen. The steel division also wants to reduce personnel costs in production and administration by an average of ten percent. The employee side has already announced a protest against the plans: the works council chairmen and representatives of IG Metall North Rhine-Westphalia condemn the austerity concept. Thyssenkrupp’s plans are part of announcements by various companies in the manufacturing sector. The labor market is visibly groaning under the weak economy and a declining order situation in industry. The labor market report from the Federal Employment Agency has also shown a downward trend for months: industrial companies’ demand for workers is falling steadily, which is linked to the decline in orders. The usual upswing on the labor market in the fall does not materialize; instead, seasonally adjusted employment fell in October; the figures for November will be presented on Friday. The Institute for Labor Market and Occupational Research (IAB) classifies the changes on the German labor market: The Researchers assume that the structural shifts already observed in the past – away from the manufacturing sector and towards the service sector – are likely to continue in the medium and long term. The reason for this is, on the one hand, the declining export momentum and the pressure to adapt in individual sectors such as the automotive industry. On the other hand, the demand for workers in the manufacturing sector will fall in the long term, as less living space will be required due to the decline in the population, explains the IAB in its statement on the structural change in the German labor market.More on the topicThe weak economic phase is also reflected in a relatively high rate of short-time work: companies In the manufacturing sector, it is increasingly being used because orders are decreasing. Current data on the use of short-time work is available until August; in this month, economic short-time work benefits were paid to 184,000 employees, which corresponds to a share of 0.5 percent of employees subject to social insurance contributions. In the same month last year there were 107,000. Compared to the previous year, more people were on short-time work in August of this year: the short-time work rate in 2023 was 0.3 percent compared to the current 0.5 percent in August 2024. Short-time work is used particularly in the manufacturing sector to bridge weak demand. Since these are one of the reasons for the crisis in companies that now want to cut jobs, it will be interesting to see to what extent the instrument of short-time work can cushion the effects.
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