German Industry’s Restructuring Wave Claims Over 5,000 Jobs as Structural Pressures Mount

Structural deficits, foreign competition, and policy uncertainty drive mass layoffs across Germany’s chemical, research, and machinery sectors, with over 5,000 positions eliminated.

The country’s industrial sector is undergoing a painful shakeout as companies across chemicals, applied research, and machinery announce thousands of job cuts in response to structural deficits, foreign competition, and policy uncertainty. Over 5,000 positions are scheduled for elimination or have already been removed, with a rare positive note coming from a furniture maker that has just exited insolvency.

Chemical and pharmaceutical sector under pressure

The Essen-based specialty chemicals group Evonik is pushing ahead with its “Tailor Made” restructuring program. By the end of 2026 the company plans to cut around 1,850 jobs, with 1,000 of those expected to go this year. It already eliminated 850 positions in 2025. Evonik has set aside roughly 100 million euros for severance payments. CEO Christian Kullmann aims to flatten bureaucratic layers, particularly at the management level, and has ruled out compulsory redundancies until 2032.

Wage negotiations in the chemical industry remain deadlocked. The seventh round of talks covering about 50,000 workers ended without a result. Limited strikes could begin as early as next week.

Beyond Evonik, political uncertainty is weighing on investment decisions. Boehringer Ingelheim has suspended 900 million euros in planned spending in Germany for the period 2027 to 2030, citing proposed legislative changes that would affect the statutory health insurance system. Across the Rhine, US pharmaceutical company Lilly is scaling back its engagement at the Alzey site by half – meaning part of the originally announced 1,000 new jobs will not materialize.

Research institutes feel the pinch

The Fraunhofer-Gesellschaft is cutting around 1,200 full-time positions. The non-profit applied research organization faces a structural deficit of two percent caused by a decline in third-party funding orders in 2025. Its total budget for 2026 amounts to 3.2 billion euros, and it employs roughly 30,900 people. President Holger Hanselka has launched the “Transform FhG” program, which includes three sub-projects. To redesign the central administration, Fraunhofer brought in the consulting firm Roland Berger. The job reductions are intended to be socially compatible by relying on the natural annual turnover rate of eight percent. The new direction is expected to dominate the annual conference on June 10 in Leipzig.

Machinery and steel makers cut deep

At the Zweibrücken site, Siempelkamp subsidiary Pallmann is axing 129 of its 282 positions. The company is abandoning in-house production to focus solely on final assembly, service and spare parts. Employees have been on short-time work for months. Worker representatives and the IG Metall union are examining alternatives.

The kitchenware industry is not spared either. Groupe SEB, the French owner of WMF, is phasing out production at three German plants – the Silit factory in Riedlingen, plus sites in Hayingen and Diez. Around 250 workers are directly affected. Across the DACH region (Germany, Austria, Switzerland), the company plans to eliminate 600 out of 4,400 jobs.

At Thyssenkrupp Steel in Dortmund, a core research team of 50 employees will stay, but the fate of another 100 researchers hangs in the balance. Their units are slated for relocation to Duisburg. The company is also outsourcing services such as plant security and logistics to external providers.

A rare positive note

The office furniture manufacturer König + Neurath has completed its self-administered insolvency process and returned to normal business operations. Through the restructuring, the workforce shrank from 830 to 700 staff. The remaining employees have agreed to forgo special payments and postpone wage increases. Since the start of April, Patrick Heinen has led the executive board.