A Quarter of Companies in Germany Expect Job Cuts Due to Artificial Intelligence

More than a quarter of companies in Germany (27.1%) expect artificial intelligence (AI) to lead to job cuts in the next five years.  “Companies, especially in industry, expect structural change to be accelerated by AI,” says Klaus Wohlrabe, Head of Surveys at ifo. Only 5.2% of companies anticipate additional jobs, while two thirds expect no change. “Companies are currently exploring the areas in which AI will boost productivity. It will be a few years before this translates into measurable effects on the labor market,” says ifo President Clemens Fuest, commenting on the result.

If there are job cuts, the companies affected expect an average reduction of around 8%, according to Wohlrabe. In industry, more than a third of companies (37.3%) expect job cuts. At just under 30%, this figure is also well above the average for the economy as a whole in the trade sector. In the construction industry, on the other hand, over 80% of companies believe that AI will not change the number of employees. At the same time, positive employment stimulus can be seen: In technology-related services such as IT or information processing, individual companies are already anticipating an increase, with expected growth of over 10% in some cases.

“AI is not only becoming a rationalization tool, but also a springboard for new job profiles,” says Wohlrabe. “The employment effects of artificial intelligence are still moderate but in the longer term, AI could change the German labor market.” For him, the challenge lies in translating the resulting productivity gains into widespread prosperity, without creating major upheaval in certain occupational groups.