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Industries specializing in metal and electricity face a significant workforce reduction of approximately 20,000 positions.

Industry sector hit by job losses: 20,000 positions eliminated in metal and electrical industries

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Factory Automation: MAN Truck & Bus Facility Deploys Robots Amid Economic Slump in Bavarian Metal and Electrical Industry (Archived Image) [Picture]

Bavarian Metallurgy and Electronics Industry: 20,000 Jobs Slashed Amid Struggles

Industrical sector beset by layoffs: 20,000 jobs eliminated in metal and electrical industries - Industries specializing in metal and electricity face a significant workforce reduction of approximately 20,000 positions.

The Bavarian metallurgy and electronics sector has experienced a whopping loss of 20,000 jobs in the past year. During the initial quarter of 2025 alone, approximately 10,000 positions got axed, as reported by the two industry associations, bayme and vbm. This steep decline in employment is the sharpest since the 2009 financial crisis and marks the fifth straight quarter of dwindling workforce numbers. Typically, these industries employed around 855,470 individuals during the first three months.

Production may have halted its downward spiral, yet the overall situation remains grim. Although production in the metallurgy and electronics sector increased by approximately two percent in the first quarter compared to the final quarter of 2024, it was still around three percent lower than the previous year, as per the economic report. Interestingly, order intake has shown signs of improvement, surpassing both the year-end 2024 figures and the first quarter of 2024.

The poor order situation, despite recent stabilization, is to blame. While factories are less likely to idle than before, companies continue to feel the heat. Bertram Brossardt, the managing director of the two associations, elucidates the prevailing challenges:

While the economic downturn may have been averted, according to Brossardt, the "structural burden factors" persist. Among the major concerns is the unresolved trade conflict with the US.

Electronics and Metallurgy Industries: An Overview of Challenges

The electronics and metallurgy sectors face multiple hurdles that lead to job losses and an unfavorable business climate.

Electronics Industry:

  • Supply Chain Vulnerability: The German electronic component manufacturing industry, including Bavaria, falters due to fragile supply chains, leading to potential production disruptions and instability in the market.
  • Market Competition: Established players like Infineon Technologies AG and Robert Bosch GmbH dominate the sector, but competition remains fierce, making it challenging for smaller companies to thrive.
  • Technological and Regulatory Pressures: Companies must invest heavily in innovation, as industry pressure ebbs towards advancements like data center thermal management and semiconductors. This can be a steep climb for smaller firms.

Metallurgy Industry:

  • Economic Conditions: The overall German economy is in a difficult phase, marked by declining exports and high labor costs, both of which impact industries like metallurgy.
  • Regulatory and Bureaucratic Barriers: The metallurgy sector grapples with bureaucratic complexity and regulatory hurdles, negatively impacting efficiency and competitiveness.
  • Environmental and Sustainability Pressures: Meeting environmental and sustainability requirements can be both costly and challenging in a competitive market.

General Challenges for Both Industries

  • Political Uncertainty: Political instability in Germany creates doubt among investors and businesses, exacerbating difficulties in both sectors.
  • Digitalization Gap: Germany's digitalization level lags behind some European peers, which affects efficiency and competitiveness in both the electronics and metallurgy sectors.
  1. Despite the recent increase in production, the employment policy for the Bavarian metallurgy and electronics industries continues to face challenges, such as high energy and interest costs, burdensome bureaucracy, fierce competition from China, and political uncertainties, leading to job losses and underutilized factories.
  2. In both the electronics and metallurgy sectors, there are persistent structural issues that impact businesses and the local economy, including supply chain vulnerability, market competition, technological and regulatory pressures, economic conditions, regulatory and bureaucratic barriers, environmental and sustainability pressures, political uncertainty, and Germany's digitalization gap.

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