Labour Market Trends H2 Germany

Published date: 21 September 2026

Between job cuts and demand for skilled professionals

The German labour market is sending mixed signals in the second half of the year. Major industrial companies are cutting jobs, unemployment is rising, and entering the labour market has become particularly challenging for those at the start of their careers. At the same time, demographic developments mean that, in the long term, Germany will continue to rely on additional workers from abroad.

Our Labour Market Report 2026 highlights these developments using the latest data.

Three key developments

The automotive industry is cutting jobs

The transformation of German industry is particularly evident in the automotive sector. Volkswagen is planning to cut up to 100,000 jobs, while Bosch is set to cut 22,000. Across the industry, around 225,000 jobs could be lost by 2035. High energy and labour costs, combined with increasing competition from Asia, are adding further pressure.

Entering the labour market is becoming more difficult

Germany is currently developing differently from many other countries in the eurozone: unemployment has risen in 42 of the past 48 months. Those at the start of their careers are particularly affected. In 2025, the number of relevant job vacancies was around 42 % below the average of the previous five years.

Demographic change remains the long-term challenge

In the future, a smaller working population will have to support a growing number of people in retirement. Immigration is already helping to mitigate this development.

What does this mean for employers?

A weaker labour market does not automatically mean that finding qualified professionals becomes easier. Instead, demand is shifting: while some companies and industries are cutting jobs, certain skills remain in short supply. At the same time, employers’ reluctance to hire people at the start of their careers is making it more difficult to develop the next generation of skilled professionals.

Employers therefore need to make more precise distinctions: Which skills will actually be required in the future? Where can existing skills be transferred? And which positions cannot be filled in the long term through the domestic labour supply alone?

Download the Labour Market Report 2026 free of charge to access the full analysis.

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