Employment in the mechanical engineering field is experiencing a deceleration, but there's no substantial transformation happening yet.
Germany's Engineering Industry Faces Continued Job Cuts in First Half of 2025
The German Engineering Federation (VDMA) has predicted that job cuts will continue in the engineering industry in the coming months, albeit at a slower pace. This news comes as the industry faces a challenging environment, with trade disputes, global uncertainty, and the energy crisis causing hesitation in investments.
According to the VDMA's latest data, employment in the mechanical engineering sector decreased by 2.5%, and the broader metal sector lost 18,700 jobs (-2.1%) compared to the previous year. This decline has contributed to a total loss of 217,000 manufacturing jobs (3.8%) since 2019, with the automotive industry alone now employing only 734,000 workers.
The export-oriented industry is under pressure, with a 5% year-over-year drop in engineering orders as of June 2025. This decline in demand, especially from outside the eurozone, has led to a production drop (estimated around 4%) that further threatens employment.
Despite the pressure, many companies are making efforts to retain skilled workers as long as possible. However, some firms like Mercedes are under pressure to cut significant numbers of jobs through restructuring programs continuing through early 2026.
There is some hope for the future, with segments linked to the energy transition and climate adaptation expected to create up to 160,000 new skilled jobs by 2030. However, demographic challenges and labor shortages could limit the industry's ability to fill these positions efficiently.
The VDMA's business climate survey for the second quarter of 2025 shows initial signs of easing, with more companies now expecting short-time work to decrease rather than increase. The employment figures provided are for companies with more than 50 employees in Germany's engineering industry. As of June 30, 2025, approximately 1.01 million people were employed in these companies.
Johannes Gernandt, the VDMA's chief economist, states that this development is an encouraging signal but not enough to speak of a sustained recovery. He also emphasised that the latest VDMA estimate is that more than 1.2 million people were employed in the engineering and plant construction sector in Germany by the end of 2024.
In conclusion, job losses are expected to continue or remain at high levels, especially in traditional mechanical and automotive engineering sectors. Recovery prospects hinge on resolving trade uncertainties, easing energy cost pressures, and successfully expanding the green energy-related engineering workforce. However, demographic trends and labor shortages may constrain rapid rebounds, with the possibility of a prolonged adjustment phase throughout 2025 and into 2026.
- The engineering industry's employment policy will need to address the ongoing job cuts as predicted, considering the challenging environment in industries like finance and business.
- The VDMA's community policy should focus on creating employment opportunities in segments like energy transition and climate adaptation to counterbalance the high levels of job losses in traditional mechanical and automotive engineering sectors.
