Persistent job reductions persist in the metal and electrical sectors

Metal and Electronics Industry Job Cuts Continue Amidst Economic Struggles

Persistent Layoffs in the Metal and Electrical Sector - Persistent job reductions persist in the metal and electrical sectors

The lingering economic crisis has seen over 14,000 jobs disappear in Baden-Württemberg's metal and electronics industry by April's end. Since peaking in 2019, the sector has lost a staggering 50,000 jobs. According to Oliver Barta, head of Südwestmetall in Stuttgart, employee plans remain significantly negative but have slightly improved. With around 957,300 people currently employed, their hard-hit industry is far from a stable or positive recovery.

Production took a dip in April despite an improved order situation, with Barta stating, "We're still far from a trend reversal or even a steady recovery." A slew of issues continuously plagues businesses, including adverse location factors, the challenges of transformation, and geopolitical risks creating max uncertainty.

After a brief March recovery stemming from advance effects due to US tariffs and added working days due to late Easter holidays, April saw production decline by 4.5% compared to the previous year. Companies have yet to capitalize on the second consecutive month of growth in orders (+8.5% compared to the previous year).

The industry's downturn sparks heated debates about Germany's location, with critics referring to it as deindustrialization. The metal, electronics, and automotive industries in Baden-Württemberg currently face significant challenges, with the automotive industry battling weak economic conditions, lower demand for electric vehicles, and the machine-building sector experiencing a lack of orders.

In 2024, the Baden-Württemberg industrial sector experienced a 0.8% decrease in employee numbers for the first time in two years of growth, with the machine-building, automotive, and metal production sectors experiencing significant job cuts.

Job Cuts at the Core

Since 2019, key sectors like the metal and electronics industries have faced significant job reductions. The metal industry has seen severe job losses, with major announcements such as ThyssenKrupp Steel's plan to slash 40% of jobs in Germany by 2030. The automotive sector, closely linked to metal and electronics, has experienced a 734,000-unit reduction in production and 35,000 job cuts, primarily due to the transition to electric vehicles and new production processes requiring fewer but more specialized jobs.

Struggles and Recovery

Various challenges, such as high energy costs, supply chain disruptions, economic downturns, and the shift to new technologies, have strained profitability, leading to cost-cutting measures like job losses. However, efforts are being made to transition to green steel, improve productivity through digitalization and reskilling, and diversify supply chains to enhance job growth.

Despite the challenges, the push for sustainability, digitalization, and supply chain diversification provides some basis for future job creation. However, the transition remains uneven, with traditional manufacturing jobs likely to decline further before new opportunities emerge.

1. In an attempt to cope with financial hardships and transitions towards new technologies, numerous employment policy adjustments may be necessary in the metal and electronics industry to address the ongoing job losses.
2. Given the significant job cuts observed across the metal, electronics, and automotive industries since 2019, there is a pressing need for community policy initiatives to support the re-skilling, up-skilling, and geographical relocation of affected workers within the industry.

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