Germany's automotive and chemical sectors face massive layoffs amid energy crisis

Germany"s automotive and chemical sectors are facing significant layoffs amid an ongoing energy crisis. Over the past 12 months, major automotive companies have announced substantial job cuts, including Volkswagen with 35,000 layoffs, Mercedes-Benz with 40,000, Audi with 7,500, Ford with 2,900, Daimler Truck with 5,000, and ZF Group with 14,000. Additionally, Bosch, Continental, and Schaeffler combined have cut 7,000 positions.

In the chemical and petrochemical industry, an estimated 20,000 to 30,000 jobs have been lost since 2022, primarily due to high energy costs and reduced production. The closure of nuclear power plants in 2023 and disruptions to the Nord Stream pipeline in 2022 have driven up gas prices, making energy-intensive chemical production less viable in Germany. Major companies, such as BASF, have announced significant job cuts, with 2,600 positions eliminated globally, most of which are in Germany, as they shift investments to regions with lower energy costs.

Production in the chemical sector fell by 3.8% in the second quarter of 2025 compared to the previous quarter, with capacity utilization dropping to 72%, the lowest level in over 30 years. Many chemical firms are relocating operations abroad, with 37% of industrial companies considering moving due to energy price pressures, contributing to ongoing deindustrialization.

The German government is attempting to address these challenges by proposing subsidies and tax cuts, but the competitiveness of the sector remains threatened by global competitors such as the U.S. and China. As previously reported, the situation has raised concerns among politicians regarding the future of German industry amidst discussions about military rearmament and support for Ukraine.

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