German Metal and Electrical Industry Faces Massive Job Cuts Amid Rising Costs and Workforce Challenges

The German metal and electrical sectors are enduring severe job losses driven by escalating production costs and regulatory pressures, with tens of thousands of positions expected to be cut throughout the coming year. The employer association Gesamtmetall reports that companies have been shedding nearly 10,000 jobs monthly for 21 consecutive months, placing unsustainable strain on the industry. Oliver Zander, Gesamtmetall's CEO, cites soaring energy, labor, and tax expenses in Germany as the primary factors making domestic production unviable for many firms. He emphasized the urgent need for German government intervention to combat increasing bureaucracy at the European Union level, urging Chancellor Friedrich Merz to push for regulatory reductions at the EU summit in February 2026 to protect industrial competitiveness.

In parallel, workforce challenges further complicate the sector's outlook. According to PwC's "Global Hopes and Fears Survey 2025," nearly half of German employees experience stress and burnout, with 22% considering changing jobs within a year, often due to insufficient orientation and leadership guidance. The survey revealed low trust in management, with only 59% trusting their direct supervisors and even fewer confident in top leadership. Young employees feel particularly overwhelmed, leading to high turnover intentions. Though 63% of workers find their roles meaningful and remain optimistic, the lack of clear leadership direction, inadequate training opportunities especially in AI integration, and poor communication are contributing to workforce instability.

Together, these economic and personnel dynamics underscore a critical juncture for Germany's metal and electrical industries. Persistent production underutilization combined with workforce dissatisfaction threatens long-term viability. Experts highlight the necessity for stronger political action against EU bureaucratic expansion and call on industry leaders to renew focus on employee engagement, trust-building, and skill development to retain talent during this challenging period.