Avalanche of Layoffs in Europe, from Germany to Spain

Across Western Europe, companies are recording losses of many hundreds of millions of euros and one after another are announcing mass layoffs. In Germany, the well-known home appliance company Miele has announced that it will cut 1300 jobs from its current 11,700 employees. According to a statement from the German company, “business was booming during the covid pandemic, but demand subsequently weakened, and turnover fell to almost €400 million in 2023.”

According to top Miele executives, “this is a long-term negative phenomenon, to which we must respond.” The decision was made to adapt “surgical” methods: most of the cuts will affect the headquarters and production site in Gütersloh, Germany. In addition, 700 employees at a washing machine factory in Poland will lose their jobs, and another 600 jobs will be cut across all German divisions related to sales, production, and management.

The situation is roughly the same in Spain, where Zegona, the British fund that manages Vodafone’s Spanish operations, has proposed to unions a plan to lay off up to 1198 employees out of a total of 3268 workers. In order to reach an agreement, Vodafone Spain has called on the unions to start a consultation period. Management stressed that the plan represents “the only way to guarantee the company’s profitability and competitiveness” and that the layoff plan is due to “economic, operational, and organizational reasons” in the conditions of “severe deterioration of the company’s trading and financial situation,” which has recently lost 400,000 customers.

Back in Germany, we find that the automobile industry is also suffering from serious problems. Sales of the dominant trio of German automakers – Volkswagen, BMW, and Mercedes-Benz – fell 1.7% in the first quarter of 2024 compared to the same period last year. As a result, profits of Germany’s largest automakers fell 25 percent. According to a study just released by international accounting and consulting firm EY (Ernst & Young), “with sales down 1.7% and profits down a quarter, the three German automakers as a whole performed significantly worse than most of their competitors.”