2025 Sees Profit Downturn and Job Losses Among Germany's Leading Companies

Germany's top companies are grappling with significant profit declines and workforce reductions in 2025, driven by structural economic challenges, geopolitical tensions, and technological changes. Deutsche Telekom leads the pack with an operating profit of 19.4 billion euros, followed by Siemens, BMW, and SAP, underscoring the benefits of diversification and digitalization in a turbulent market. However, this financial stability contrasts with substantial job cuts across Germany's leading firms, totaling approximately 17,500 positions lost primarily in domestic and administrative roles. Overall, employment has shrunk by 0.4%, equating to nearly 100,000 fewer jobs compared to 2023.

The shift towards efficiency through artificial intelligence is partly responsible for companies slowing their hiring processes, creating a challenging landscape for job seekers, especially recent graduates. Besides technological impacts, the profit decline stems from global uncertainties, geopolitical tensions, unfavorable U.S. trade policies adding competitive and cost pressures, and intensified competition from China affecting German industrial exports.

Despite the uneasy outlook, professional services firm EY expresses cautious optimism for 2026. They anticipate that strategic realignment, coupled with advancements in electric and future technologies, could help German industry navigate its current “valley of profit decline.” However, it remains uncertain whether Germany will reclaim its status as the economic growth engine.

In a related economic sentiment poll, a majority of German companies oppose raising the retirement age to 70, favoring voluntary work-life extension instead. Yet, 25% of firms foresee economic deterioration in 2026, with an expectation of increased bankruptcies. While about 71% of companies do not plan workforce reductions and nearly 30% aim to hire, confidence in government economic management since Chancellor Friedrich Merz’s tenure has notably declined.

These developments illustrate a German corporate sector caught between adapting to disruptive technologies and external pressures while cautiously positioning itself for the challenges and opportunities of the coming year.