Approximately four out of every ten businesses anticipate reducing their workforce by 2025.

Approximately four out of every ten businesses anticipate reducing their workforce by 2025.

The economic downturn has led to around 40% of companies considering job reductions in the next year, as suggested by a survey conducted by the Institute of the German Economy (IW). The Handelsblatt newspaper reported this, citing the findings of the institute, which leans towards employer-friendly views. According to the survey, around 38% of the over 2,000 companies surveyed intend to downsize their workforce due to the poor economic climate.

The survey revealed that 40% of companies anticipate a decline in business prospects for 2025, while just 5% are hopeful about the upcoming year. Only 23% of companies plan to boost investments, while 40% expect a decrease.

"Economic Deterioration"

The IW concluded from the survey that there is no sign of an economic recovery. Instead, it forecasts that the German economy will continue to experience stagnation for another year.

Furthermore, the IW analysis suggests that this economic stagnation will have implications for the labor market. The consistent growth in employment in Germany since 2005 has come to an end, as the report mentions, particularly affecting the industry, which is grappling with a structural crisis, leading to "permanent job losses."

In recent weeks, several large industrial companies in Germany, such as VW, Ford, Bosch, ZF, and Thyssenkrupp, have announced plans to drastically reduce their workforce over the upcoming years.

The economic stagnation predicted by the IW could potentially exacerbate unemployment rates, given the anticipated job cuts in various industries.

In light of the structural crisis facing the industry, job losses are likely to become permanent, further contributing to the unemployment problem.

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