Curbside Surrender: Germany's Top Corporations Reporting Lower Profits and Mass Layoffs
Major businesses experiencing notable decreases in their earnings - The Dax conglomerate sees substantial reduction in earnings
Get ready for some hard-hitting news, cuz it's a rough ride for Germany's leading corporations! The DAX giants are struggling, feeling the bite of an economic slowdown and intensified international competition, reports auditing and consulting firm EY.
In the first quarter of 2025, the total revenue of these DAX companies, excluding banks, rose a paltry 3.3 percent to 458.9 billion euros. But don't let the number fool ya - ten companies saw a decline in revenue, including big-hitters like BMW, Mercedes-Benz, BASF, and Bayer.
Insurance companies, saddled with the wildfires around Los Angeles at the start of the year, took a real hit. Sixteen of the DAX companies earned less operating profit than the previous year, including all automakers and reinsurers Hannover Re and Munich Re. The overall operating profit (EBIT) before interest and taxes shrank by 8.1 percent to 44.8 billion euros.
Yeah, you read that right - they're cutting thousands of jobs. The workforce at the 27 DAX companies that reported figures dropped by 1 percent to 3.17 million, meaning about 32,000 positions bit the dust within a year.
Despite the economic weakness, geopolitical crises, and the trade dispute with the USA, many DAX companies are managing to hang on, according to Henrik Ahlers, CEO of EY. While a majority still achieved an increase in revenue, the impact of US tariffs has yet to fully reveal itself. "Many companies have built up their inventories and made advance purchases to soak up potential tariffs and lower prices for their US customers," Ahlers explained. But it's the second half of the year that'll give us a realistic picture of the situation.
While some DAX companies saw a boom - Rheinmetall and MTU Aero Engines reported considerable increases in revenue - the automakers faced losses. The auto sector reported a 2.5 percent decline in revenue and a 42 percent drop in profits.
The highest operating profit in the first quarter went to Deutsche Telekom, followed closely by Allianz and Siemens. Only one DAX company - Porsche Holding - reported an operating loss.
But hey, not all news is bad! The allemongers in the defense industry are thriving, thanks to increased government spending.
So, there you have it - the economic slowdown in Germany has hit the DAX companies hard, leading to profit losses, revenue pressure, and layoffs on a massive scale. The automotive and chemical sectors have taken the heaviest blows, and while some sectors are booming, the trade tensions and geopolitical crises have added uncertainty, making things tricky for German corporations in 2025.
In the midst of Germany's top corporations reporting lower profits and mass layoffs, there's a possibility for some sectors to receive a boost in funding. For instance, the defense industry, due to increased government spending, might find financial opportunities in vocational training programs, providing a chance for businesses and EC countries to collaborate and foster vocational training in these industries. finance, business, vocational training, EC countries