A majority of German business associations are bracing for job losses in 2026, signalling growing workforce risk as the country’s economic downturn shows no signs of easing.A new survey by the German Economic Institute (IW) found that 22 out of 46 business associations expect companies to reduce headcount next year, while only nine anticipate increased hiring. The remaining 15 associations expect employment levels to remain broadly unchanged.
Industry groups were the most pessimistic, citing continued pressure from global protectionist policies, weak export demand and subdued investment activity. These factors are weighing heavily on Germany’s manufacturing base, which has traditionally been a key source of employment growth.
The findings point to a cautious hiring environment heading into 2026, with employers prioritising cost control and productivity over workforce expansion. For employees, the outlook suggests heightened job insecurity, particularly in export-reliant sectors already affected by slowing global trade.The survey underscores how prolonged economic weakness is beginning to translate into tangible workforce decisions, as business confidence remains fragile and recovery prospects uncertain.