Job Cuts in Germany Slowing Down (January 2026)

Companies in Germany are planning less frequently to reduce their headcount. The ifo Employment Barometer rose to 93.4 points in January, up from 91.9 points in December. “Job cuts are slowing down, but have not yet come to a standstill,” says Klaus Wohlrabe, Head of Surveys at ifo. “The labor market remains under pressure, especially in industry – with no turnaround yet in sight.”

Jobs are still being cut across almost all areas of industry. Most notably, the automotive industry and companies in the metal sector are planning to employ fewer staff. Companies in the retail sector also want to make do with fewer employees in the new year. By contrast, the barometer rose noticeably in the service sector. Positive and negative responses are currently in balance. Engineering firms and IT service providers in particular are increasingly looking to recruit. Little has changed in the construction industry, with companies planning to keep the same number of employees.