Germany, August 2026 – Job cuts in the automotive industry are accelerating, pushing employment to its lowest level since 2005. At the end of June, the workforce at manufacturers and suppliers stood at just 691,500—a drop of 42,300 compared to the previous year. This trend is driven by cost-cutting programs, weak sales markets, growing competition from China, and high operating costs in Germany. Suppliers have been hit particularly hard, while further cutbacks at BMW, Porsche, Volkswagen, Bosch, and ZF have already been announced or are in the pipeline.
Suppliers Hit Hardest by Job Losses
Manufacturers of parts and accessories have been hit hardest by job cuts; employment in this sector fell by 7.6 percent over the course of a year. Meanwhile, the number of jobs at vehicle manufacturers dropped by 6.1 percent. In contrast, the smaller sector comprising vehicle bodies, superstructures, and trailers grew by ten percent, reaching a workforce of 42,800.
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Industrial employment is shrinking outside the automotive sector as well. Across the manufacturing sector as a whole, employment fell by 2.7 percent over the course of a year to 5.29 million people. At the end of June, the mechanical engineering sector employed 905,900 people, remaining Germany’s largest industrial sector by workforce size. Despite a sharp decline, the automotive industry continues to hold second place.
Job cuts driven by weaker sales markets and structural change
This trend stems from several simultaneous factors. German manufacturers are losing market share in China and facing stiffer competition from Chinese rivals in Europe. Additionally, US tariffs are weighing on exports, while the shift to electric mobility requires heavy investment. Suppliers, in particular, are forced to finance new technologies while simultaneously coping with declining business related to traditional powertrains.
However, cost-cutting programs at major corporations indicate that current employment statistics do not yet reflect the full extent of this trend. BMW intends to reduce its global workforce by around 8,000 positions by the end of 2027, with several thousand of those cuts taking place in Germany. Porsche plans to reduce its total headcount by approximately 9,000 positions by 2035. According to Reuters, Volkswagen is considering significantly expanding its cost-cutting measures and is weighing potential plant closures in Germany.
VDA forecasts a total loss of 225,000 jobs by 2035
The German Association of the Automotive Industry (VDA) therefore anticipates further job cuts in Germany. According to its forecast, around 225,000 jobs could disappear by 2035 compared to 2019 levels if underlying conditions do not improve significantly. The VDA had previously projected a loss of around 190,000 jobs. By its calculations, approximately 100,000 jobs have already been lost since 2019.
This means employment is declining more rapidly than the industry had anticipated just a few years ago. A particularly critical issue, in the VDA’s assessment, is that new jobs are increasingly being created outside Germany. High labor costs, bureaucracy, and less favorable investment conditions are driving this shift. Consequently, the current workforce of 691,500 represents not only a statistical low but also a profound shift in industrial value creation.
Author: Blackout News
Sources: Welt (14.08.26) – Reuters (29.07.26) – Automobil Produktion (29.07.26)