Mass company closures: Germany doesn't have too few people, but the wrong jobs

Red Alert: The Anatomy of a Misunderstood Crisis

In 2024, 196,100 companies nationwide ceased operations, an increase of 16 percent over the previous year and the highest figure since 2011. The magnitude of this development only becomes clear when one realizes that only about 10 percent of these closures were due to bankruptcies. The overwhelming majority ended their business in an orderly manner for other reasons, with the shortage of skilled workers playing a central role. But while politicians and businesses reflexively call for the recruitment of foreign workers, they are overlooking a fundamental truth: We are trying to combat a structural problem with a short-term solution that amounts to trying to plug one hole while another opens up.

The numbers speak volumes. 84 percent of companies are affected by staffing problems, 43 percent are unable to fill vacancies at least partially, and 82 percent of survey participants expect negative consequences for their company due to a shortage of skilled workers. Forty percent are having to limit their offerings and are losing orders, while 76 percent report productivity losses due to a lack of staff. The economic damage is immense: €49 billion in lost value creation due to a shortage of skilled workers in 2024 alone, with 1.8 to 2 million unfilled positions in the German economy.

But this crisis is more than a challenge—it's a historic opportunity. We're not simply facing a labor shortage, but the greatest social and professional transformation ever seen. And not just in Germany, but worldwide. The question isn't whether this transformation will happen, but how we shape it. It's time for us to wake up and see not the drama, but the diverse challenges and opportunities that lie ahead.

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The figures cited here come from two different surveys conducted by German research institutes and studies:

IAB Establishment Panel 2024 (Institute for Employment Research)

84 percent of companies are affected by staffing problems: This figure comes from the IAB Establishment Panel 2024, a representative survey of around 15,000 companies from all sectors and sizes in Germany. The IAB is the research institute of the Federal Employment Agency. The study was published in May 2025 and refers to data collected in 2024.

43 percent are unable to fill vacancies at least partially: This figure comes from the 2023/2024 DIHK Skilled Worker Report (German Chamber of Industry and Commerce). For its report, the DIHK surveyed more than 22,000 companies of various sizes and from various industries as part of its economic survey. In December 2024, this figure was confirmed at 43 percent.

DIHK Skilled Worker Report 2023/2024

82 percent of survey participants expect negative consequences for their company due to the shortage of skilled workers: From the DIHK Skilled Workers Report 2023/2024. The survey found that more than eight out of ten companies expect negative effects from the shortage of skilled workers.

40 percent are having to limit their offerings and are losing orders: Also from the DIHK Skilled Worker Report 2023/2024. Four out of ten companies stated that they have had to reject orders or reduce their range of services due to staff shortages.

Stepstone Study 2023

76 percent report productivity losses due to staff shortages: This figure comes from a representative study by The Stepstone Group from 2023. The survey included 10,000 respondents, including approximately 2,800 managers and HR managers. This figure represents an increase of 16 percentage points compared to pre-COVID levels.

IW Study 2024 (Cologne Institute of the German Economy)

A loss of €49 billion in value added due to a shortage of skilled workers in 2024 alone: ​​This calculation comes from a study by the Cologne Institute for Economic Research (IW) from May 2024. The study used the Global Economic Model from Oxford Economics to calculate production potential. The IW is an employer-oriented research institute.

1.8 to 2 million unfilled positions in the German economy: This projection also comes from the DIHK Skilled Workers Report 2023/2024. The DIHK estimated that over 1.8 million positions will remain unfilled in the overall economy. The figure of 2 million was cited in previous DIHK surveys from January 2023.

In the Mirror of History: Why Change Does Not Mean Destruction

To understand the dimensions of the current transformation, it's worth taking a look back at economic history. The industrialization of the 18th and 19th centuries was the first major technological revolution that fundamentally changed work and society. When the steam engine and the mechanical loom were invented, artisans and weavers were terrified of losing their livelihoods. The Luddites destroyed machines in despair over the impending loss of their jobs.

What actually happened? The transition from an agrarian to an industrial society was painful and accompanied by social upheaval. Around 1800, about two-thirds of the workforce worked in agriculture; by 1850, about 55 percent, and by 1870, that figure had fallen to half. Yet despite all the fears, industrialization did not lead to mass unemployment, but rather to an unprecedented rise in living standards and the emergence of entirely new occupational fields. Factory workers, mechanical engineers, railway workers, engineers—all these professions did not exist before industrialization, or only in their infancy.

The second industrial revolution, triggered by high-voltage technology and the assembly line, triggered similar fears. Scientific management, as developed by Taylor and Ford, was supposedly meant to make workers redundant. Instead, it created mass prosperity and a broad middle class. The third industrial revolution, based on microelectronics and automation, also led to profound changes, but also to the emergence of entire new industries: software, IT services, telecommunications, and digital media.

The historical lesson is clear: technological revolutions don't simply destroy jobs; they transform the world of work. Jobs disappear, but new ones emerge, often on a scale that far exceeds the number lost. Crucially, however, these transformations have never been smooth. They have required massive investments in education and training, political decisions, and societal adjustment processes.

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The perfect storm: AI, robotics and demographic change

The fourth industrial revolution differs from its predecessors in its speed and complexity. It is not driven by a single technology, but by the interplay of several revolutionary developments: artificial intelligence, robotics, networked cyber-physical systems, big data, and machine learning.

The developments in robotics are particularly impressive. Germany recorded the installation of 27,000 new industrial robots in 2024, and 40 percent of all factory robots installed in the EU are located in Germany. The robot density is 429 units per 10,000 workers, ranking Germany fourth in the world. Particularly noteworthy are the developments in the metalworking industry, with growth of 23 percent, and in the chemicals and plastics industry, with an increase of 71 percent.

But the real revolution is yet to come: humanoid robots. Humanoid robots for industrial use will be mass-produced as early as 2025. Studies predict that by 2030, 20 million humanoid robots will be in use worldwide—a fivefold increase compared to the current approximately 4.3 million industrial robots and cobots. The payback period for humanoid robots is estimated at less than 0.56 years, making them a highly attractive investment. Initial pilot projects already show that humanoid robots can automate up to 40 percent of previously manually performed tasks.

At the same time, artificial intelligence is transforming the world of work at a breathtaking pace. According to McKinsey, up to three million jobs in Germany could be affected by this change by 2030, corresponding to seven percent of total employment. Almost a third of working hours in the EU could be automated by 2030, and as much as 45 percent by 2035. But crucially, AI doesn't simply destroy jobs; it transforms them. The World Economic Forum predicts that AI will create 170 million new jobs worldwide by 2030, while eliminating 92 million—a net increase of 14 percent.

This technological transformation is coincident with a demographic shift of unprecedented proportions. The baby boomer generation comprised approximately 19.5 million people in Germany in 2022. By 2036, all of these workers will have reached retirement age or passed away. This compares to approximately 12.5 million young people entering the labor force over the same period. The labor force will decline by almost 3 million people by 2040. The bottom line is that the German economy will lose up to 6 million workers by 2035.

This simultaneity of technological breakthrough and demographic change is historically unique. It creates a situation in which robotics and automation are no longer optional, but are becoming an absolute necessity to maintain Germany's prosperity and economic performance.

Germany's acid test: Between succession crisis and robot acceptance

The current situation is paradoxical. Despite economic weakness and rising unemployment, the skills gap remains at a historically high level. On average in 2023/2024, there were 532,000 vacancies for which no suitably qualified skilled workers were registered as unemployed across Germany. The situation is particularly tense in healthcare and social services, electrical trades, and skilled trades. The ten occupations with the largest skills gaps account for almost 30 percent of the total skills gap.

Business succession is dramatically exacerbating the situation. Between 2022 and 2026, approximately 190,000 companies are scheduled for handover, averaging around 38,000 handovers per year. At 54 percent, more than half of small and medium-sized businesses are already 55 years or older. The number of entrepreneurs seeking a succession solution is three times higher than the number of interested parties. In the next five years, more than 250,000 companies face collapse if a handover does not occur. By the end of 2025, 231,000 companies are considering closure—a historic high.

The situation is particularly dramatic in energy-intensive industries, with 1,050 closures, an increase of 26 percent. Technology-intensive services, construction, and healthcare recorded at least 34,300 closures that were directly or significantly caused or contributed to by skilled labor shortages—approximately 17 to 18 percent of all company closures.

At the same time, a remarkable development in public perception is emerging: 77 percent of employees in Germany support the use of robots in the workplace. Three-quarters are convinced that robotics will counteract the shortage of skilled workers. Around 80 percent would like robots to take over dangerous, unhealthy, or repetitive tasks. The vast majority see robots as an opportunity to secure the country's competitiveness. This acceptance is an essential prerequisite for the successful transformation of the world of work.

But policymakers are lagging behind technological possibilities and social acceptance. Instead of developing a comprehensive strategy for robotization and automation, the shortage of skilled workers is primarily defined as an immigration problem. This view is too simplistic and ignores both the ethical implications and the technological realities.

The future is already here: How automation works in practice

The successful integration of robotics and automation is already evident in numerous companies and industries. In the automotive industry, Mercedes is testing the use of the humanoid robot Apollo from Apptronik. The robot is approximately 1.73 meters tall, weighs 73 kilograms, and can lift 25 kilograms. It is intended for use in production, for example, in delivering assembly kits to workers. The pilot projects show that the integration into existing production processes is proceeding more smoothly than expected.

In the logistics industry, Amazon uses the Digit robot from Agility Robotics. The approximately 1.75-meter-tall robot can transport loads of up to 16 kilograms and is currently being tested in warehouses. GXO Logistics uses similar systems to optimize its warehouse logistics. Experience shows that the robots do not replace jobs, but rather complement them and relieve employees of physically demanding tasks.

A change is also taking place in small and medium-sized businesses. Programming robots has become significantly easier. 81 percent report that operation has become more straightforward, enabling their use even in smaller companies. Collaborative robots and intuitive operating concepts allow automation to be implemented even without specialized IT departments. The investment costs for humanoid robots are falling rapidly – ​​manufacturers like Unitree are bringing models onto the market for around €16,000, compared to several hundred thousand euros for previous systems.

A particularly interesting example is a study by the Institute for Employment Research: Between 1994 and 2014, 275,000 jobs were lost in German industry due to the use of robots – not due to layoffs, however, but because fewer young people were hired. At the same time, the same number of new jobs were created in the service sector. The bottom line is that the number of jobs has barely changed – a clear contrast to the US, where industrial workers have lost their jobs in droves due to automation.

Another study by the Centre for European Economic Research concludes that automation was responsible for 560,000 new jobs in Germany between 2016 and 2021. The energy and water supply sector recorded job growth of 3.3 percent, the electronics and automotive sectors 3.2 percent, and other manufacturing even 4 percent. These figures clearly refute the thesis that automation inevitably leads to mass unemployment.

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Prosperity at the expense of others: The ethics of global competition for skilled workers

While technological solutions are promising, the ethical dimension of recruiting workers from abroad is often underestimated or ignored. Germany and other European countries are actively recruiting skilled workers from developing and emerging countries that urgently need these skilled workers for their own development.

Brain drain, the migration of highly skilled workers from developing countries, has serious consequences for the countries of origin. The healthcare sector, education, the public sector, and science and research are particularly affected. The regions with the highest rates of skilled migration are the Caribbean and Central America, sub-Saharan Africa, Southeast Asia, and the Pacific region—precisely those regions that most urgently need skilled workers to advance their own development.

The negative consequences for the countries of origin are significant: loss of human capital, personnel shortages in strategic sectors, loss of economic investment in education and training, and weakening of institutions and the country's innovative capacity. Small and poor developing countries in particular tend to be weakened by brain drain. The shortage of skilled workers in key sectors such as health and education negatively impacts the achievement of the UN Sustainable Development Goals.

It is ethically questionable for Germany, one of the richest countries in the world, to systematically poach skilled workers from poorer countries who are urgently needed to build functioning healthcare systems, educational institutions, and economic structures. This policy exacerbates global inequalities and undermines the development opportunities of entire regions. While Germany may benefit from skilled immigrants in the short term, new causes of flight and migration flows will emerge in the long term because the countries of origin lack expertise in sustainable development.

Moreover, this strategy is ultimately unsustainable. The demographic challenges Germany faces are similar to those faced by many other countries, or will be in the foreseeable future. China, for example, has doubled its robot density within four years and, with 470 units per 10,000 workers, is now ahead of Germany. China has recognized that the future lies not in competition for labor, but in automation and increased productivity through technology.

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The social hurdles of transformation: Between job anxiety and the skills gap

Despite all the opportunities, the transformation of the world of work is fraught with significant challenges and controversies. Fears of job losses due to AI and robotics are real and justified. According to Goldman Sachs, up to 300 million full-time jobs worldwide are affected by automation through generative AI. Approximately two-thirds of current jobs are exposed to some degree of AI automation, and generative AI could replace up to a quarter of current jobs.

Particularly affected are occupations with a high proportion of routine tasks: administrative office workers, cashiers, accountants, bank employees, factory workers, warehouse workers, telemarketers, data entry clerks, and mail sorters. More than half of all AI-induced job changes in Germany fall into the area of ​​office and administrative work. Along with Italy, Germany is particularly affected because these jobs account for a high proportion of total employment.

The social dimension of this transformation should not be underestimated. Those who fear for their jobs and their future will hardly be enthusiastic about a policy of technological modernization. This transformation is therefore not only an ecological and economic challenge, but also a test of social cohesion.

Another problem is the skills gap. 39 percent of current skills will be obsolete in the next five years. 59 percent of workers will need further training by 2030. However, participation in continuing education is below average, especially among those employees with a high proportion of routine tasks, who are at greatest risk of being affected by automation. This poses a risk of a split in the labor market between highly qualified winners and left-behind losers of digitalization.

Furthermore, the productivity gains from automation and AI are not automatically distributed fairly. Between 1994 and 2014, German companies were able to convert the increased productivity achieved through robotics into higher profits. A large proportion of workers earned less as a result of automation. This primarily affected middle-skilled workers, such as skilled workers. The primary beneficiaries were higher-skilled workers and companies. Without political countermeasures, increasing inequality threatens.

Nevertheless, it would be wrong to conclude from these challenges that we want or can halt the transformation. The course has long been set. China, the US, and other economic powers are investing heavily in robotics and AI. Europe's economy is falling behind in international competitiveness and urgently needs to catch up. Robotics and automation are key technologies for the future growth of national economies, as they increase productivity, drive innovation, and open up new opportunities.

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The agenda for tomorrow: qualification, vision and a new social contract

The future of work will not be shaped by immigration, but by intelligent automation, comprehensive training, and a positive vision for the world of work of tomorrow. The technological possibilities exist and are rapidly evolving. By 2030, the technological maturity of humanoid robots will be so advanced that they will be able to surpass human capabilities in terms of movement speed, flexibility, and fine motor skills. Acquisition costs will continue to decline, and the areas of application will expand massively.

At the same time, AI will not only take over repetitive tasks, but will increasingly also support and partially replace complex cognitive activities. New professional fields are emerging: AI trainers, prompt engineers, ethics experts for AI systems, human-machine interaction specialists, transformation mentors, robotics service technicians, and data ethicists. The World Economic Forum predicts that 58 percent of all employees will require new or further training by 2025, with 19 percent of them requiring additional training or retraining.

The key to success lies in a comprehensive training approach. Lifelong learning must become a matter of course. This applies to semi-skilled and unskilled workers as well as skilled workers and engineers. Funding for continuing professional development for employees must be massively expanded. Starting April 2024, employees whose jobs are affected by transformation will be able to receive funding for continuing training. This is conditional on the company having a works agreement or collective agreement that regulates the training needs resulting from structural change.

Companies must develop sustainable training strategies. As an industrial location, Germany bears a great deal of social responsibility, as the regional availability of skilled workers will play a much greater role in investment decisions. Successful companies already pursue forward-looking in-house training policies to secure access to the skilled workers they need and preserve jobs.

Retraining programs must be specifically tailored to the needs of the digitalized and automated world of work. Digital management assistants, IT specialists, and cyber-physical systems specialists—these professions are urgently needed. With the approval of funding agencies such as the Federal Employment Agency or job center, retraining programs can be fully subsidized. Participants who successfully complete a retraining program receive up to €6,100 in subsidies, plus a monthly continuing education allowance of €150.

What is crucial, however, is a positive vision for the future of work. AI and robotics are not a threat, but an opportunity to make work more human. When robots take over dangerous, unhealthy, and monotonous tasks, people are freed up for creative, social, and strategic tasks. The productivity increase through automation can—with the right policy design—lead to shorter working hours, higher wages, and better working conditions. The European model of the social market economy offers better conditions for this than the Anglo-Saxon model, as the comparison of the consequences of automation between Germany and the USA shows.

The transformation also requires a redesign of social security systems. If productivity gains are increasingly achieved through capital rather than labor, the financing of social security systems must be reconsidered. Concepts such as a value-added tax or a machine tax are being discussed. Likewise, an unconditional basic income or a negative income tax could ensure social security in a highly automated economy.

A call for course correction: reinvent work instead of importing it

We are facing a turning point of historic significance. The greatest professional and societal transformation of all time is not an abstract vision of the future, but is already well underway. The question is not whether this transformation will happen, but how we shape it. Attempting to solve the skills shortage primarily by recruiting foreign workers is like trying to fill one hole while another opens up. Furthermore, poaching urgently needed skilled workers from weaker economies is ethically questionable.

The potential of robotics and artificial intelligence is still not sufficiently recognized and appreciated in politics and business. The loss of jobs due to AI is primarily viewed in the negative perception of job losses, rather than developing a model for retraining and transformation. But even that falls short. In fact, new jobs are not just being created to replace old ones – new types of work, new forms of value creation, and new opportunities for self-realization are emerging.

Historical experience teaches us that technological revolutions have ultimately led to greater prosperity and better living conditions, even if the path to this goal was paved with challenges. Industrialization has freed us from hard physical labor, electrification has brought us light and warmth, and digitalization has given us access to knowledge and global communication. Robotization and the AI ​​revolution can free us from monotonous, dangerous, and unhealthy activities and create space for creative, social, and meaningful work.

The technological prerequisites are in place. Social acceptance is there. What is lacking is the political will and the strategic vision. Instead of reflexively calling for workers from abroad, we should invest massively in robotics, automation, and the training of our own workforce. Instead of viewing the transformation as a threat, we should recognize the many challenges and opportunities that lie ahead.

Germany has the opportunity to become a pioneer of human-centered automation, where technology serves people and not the other way around. We can demonstrate that economic success and social justice, increased productivity and job quality, technological progress and social cohesion are not mutually exclusive, but rather interdependent. The 196,100 company closures in 2024, the loss of €49 billion in value creation due to a shortage of skilled workers, the threatened closure of 231,000 companies by the end of 2025 – none of this is inevitable.

It's time for us to wake up. The crisis is real, but it's also a historic opportunity. We're not facing the end of work, but rather its greatest transformation. The question isn't whether we have enough workers, but how we redefine and organize work. The baby boomers are retiring—that's not the problem, that's the solution. Because it creates the necessary space for transformation without necessarily leading to mass unemployment.

Not seeing the drama, but seeing the many challenges – that's the attitude we need now. The greatest social and professional transformation ever seen requires courage, vision, and the will to shape things. The alternative is not preserving the status quo through immigration, but economic decline in a globalized world in which other countries are more consistently exploiting the opportunities offered by technology. The future belongs not to those who import labor, but to those who reinvent work.

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