In 2025, large-scale layoffs occurred in the German machinery and equipment industry, with a total of 22,000 layoffs.
Behind this situation is actually the overall dilemma facing the German industry. In 2025, the entire German industrial sector will lay off more than 120,000 people, almost twice the size of the previous year.
The German Machinery and Equipment Federation (VDMA) clearly pointed out that US tariffs and competition from China are one of the main reasons for layoffs.
The trade barriers set up by the United States have significantly increased the export costs of German machinery and equipment. This has made the competitiveness of German equipment in the North American market sharply reduced, making it difficult to gain a foothold.
China’s manufacturing industry has been continuously upgrading in recent years, especially in the high-end field, which has made significant progress and is rapidly seizing global market share. This has undoubtedly squeezed Germany’s traditional areas of advantage.
Chinese companies have won more opportunities in the global market with their advanced technology, efficient production and reasonable prices, further compressing the market space of the German machinery and equipment industry.
In addition to external competitive pressure, shrinkage within the industry is also the root cause of layoffs.
Data from Ernst & Young (EY) show that German industrial turnover fell by 1.1% in 2025, and this was the tenth consecutive quarter of decline.
Since 2023, industrial turnover has fallen by nearly 5%.
The performance of key downstream industries was particularly weak, which had a direct impact on upstream machinery and equipment procurement.
In the automotive industry, turnover fell by about 3% and about 50,000 people were laid off.
As an important pillar industry in Germany, the downturn in the automobile industry has directly affected the demand for machinery and equipment.
In order to reduce costs, automobile manufacturers have reduced the purchase and update of new equipment.
The paper and textile industries are also facing difficulties, with turnover falling by about 3%, of which layoffs in the textile industry are as high as 16%.
Weak demand in these industries has forced companies to cut spending and cut costs through layoffs.
In addition, in order to cope with the current pressure, large car companies are accelerating the transfer of production and research and development overseas, which is undoubtedly at the expense of domestic jobs in Germany.
Experts warn that due to continued weak orders and huge competitive pressure, the German industrial sector may continue to face layoffs in 2026.
The layoffs in the German machinery and equipment industry not only reflect the industry’s own problems, but also reflect the challenges faced by German industry in the changing global economic landscape.
How to deal with these challenges and re-enhance the competitiveness of German industry will be a question that the German government and enterprises need to think about together.
