One in four German companies considering job cuts amid high energy prices

One in four German companies considering job cuts amid high energy prices

Facing hugely increased costs for energy and an uncertain economic outlook, a full 25 percent of local and international companies in Germany have said that they plan to cut jobs in the near future, according to a new survey. 

German businesses suffering amid energy crisis

The energy crisis is hitting the German labour market harder and harder as production is dampened, investments are held back, and prices spiral. In a survey conducted by the Ifo Institute on behalf of the Foundation for Family Businesses, 25 percent of companies in the federal republic said that they were planning to cut jobs, up from just 14 percent in April. 

Asked about other ways in which they were dealing with the energy crisis, 90 percent of companies said they were planning to or already had passed their increased costs on to customers. 82 percent said they were investing in making their companies more energy efficient, while 48 percent said they were considering switching to alternative energy sources, or already have. 

Other measures companies have taken to reduce costs include cutting back on heating, reducing overtime and holiday days, allowing people to work from home more often, and even putting people on short-time work (Kurzarbeit)

9 percent of companies considering relocating production abroad

Concerningly, around one in eight companies (13 percent) said they were considering stopping production altogether as they battle with rising costs, while 9 percent said that relocating production abroad was now an option, up from 6 percent six months ago. 

Rainer Kirchdӧrfer said the results of the survey - particularly the increasing desire to relocate abroad - were an alarm signal. “This fatal development in Germany is accelerating,” he is quoted as saying by Focus Online. “Companies are reducing production in Germany or relocating their production to places where energy costs, taxes and bureaucracy are lower.” 

“We need measures to make Germany competitive again as a business location,” he insisted. 



Abi Carter

Managing Editor at IamExpat Media. Abi studied German and History at the University of Manchester and has since lived in Berlin, Hamburg and Utrecht, working since 2017 as a writer,...

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