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Pandemic predicted to cut a million medium-sized jobs in Germany

More than a million jobs could be lost this year in small- and medium-sized enterprises -- the backbone of the German economy -- due to the coronavirus pandemic, a study showed Thursday.

Published: 22 October 2020 15:41 CEST

Pandemic predicted to cut a million medium-sized jobs in Germany

An employee in Torgelow, Mecklenburg-Western Pomerania in July. Photo: DPA

In its annual survey of the “Mittelstand” sector, the public investment bank KfW estimated that SMEs could shed some 3.3 percent of their workforce by the end of the year, equivalent to some 1.1 million jobs.

There are an estimated 3.8 million such companies in Germany — predominantly family-run businesses specialised in sectors such as manufacturing, often for the export market.

They employ around 60 percent of workers — 32.3 million in 2019 — and its share in Germany's overall economic activity is more than 71 percent.

READ ALSO: Working in Germany: How is the pandemic affecting jobs?

KfW said that the coronavirus pandemic was leaving “deep marks” on the SME sector.

“Worries and uncertainty are always high. Sales are breaking down more than in the financial crisis,” it said.

The historic recession into which the virus lockdowns plunged Europe's biggest economy and the anxiety about the recovery are impacting the outlook this year for SMEs, KfW wrote.

“More than one out of every two SMEs — some two million companies — are expecting a drop in revenue,” with a 12-percent drop expected for the sector as a whole, equivalent to 545 billion euros.

KfW signalled that companies were also holding off investments projects due to “uncertainty and tight funds”.

By the end of August, Germany had already lost 670,000 jobs, with “very pessimistic” macroeconomic forecasts pointing to a difficult final quarter.

Earlier Thursday, data showed consumer confidence had sunk heading into November as fears rise of further restrictions to curb the spread of the pandemic.

As part of a vast support plan from the German government, KfW has paid out 55 billion euros in aid since April to companies in difficulty.

The current climate of “great uncertainty” must be countered by “targeted economic policy measures”, the study concludes.

READ ALSO: Pandemic to 'cut thousands of banking jobs' in Frankfurt

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Which Bavaria-based companies regularly hire English speakers?

Munich ranks third in German cities with the highest total GDP, behind Berlin and Hamburg, but in terms of GDP per capita, it’s higher than both of them.

It also consistently ranks high, often highest, in terms of average household income.

As of 2023, nine of the 40 companies listed on DAX, Germany’s stock index, were based in Bavaria. Seven of those are based specifically in Munich.

While Frankfurt is commonly known to be Germany’s business capital, Munich can claim the title of Germany’s insurance capital, which is saying something, as Germany is home to some of the largest insurance firms in the world, like Allianz.

Beyond the state’s capital city, a number of international companies are based elsewhere in Bavaria, particularly in the Franken region, near Nuremberg.

Which companies actively hire English speakers?

Bavaria, and Munich in particular, is home to a number of companies at the forefront of international business. But the state is known for its traditional, sometimes conservative, culture, which affects its business culture as well.

Whereas companies embracing English as their primary business language are easy to find in Berlin, the practice is less common in the south. That said, there are some notable exceptions.

Sportswear giants, Adidas and Puma, both have their headquarters near Nuremberg in Herzogenaurach, and regularly recruit English speaking international talent.

“As an international company, our teams reflect the rich diversity of our consumers and communities,” Jon Greenhalgh, Senior Manager Media Relations for Adidas told The Local. “Fostering a culture of inclusion where we value and leverage differences, ensures that we can authentically engage with our employees and truly connect with our consumers.”

He added that around 40 per cent of Adidas’ Germany-based employees are foreign nationals, from over 100 different countries.

Siemens and BMW rank among Bavaria’s top employers, and are also known to hire their fair share of foreigners.

“In Germany, we recently had around 2,000 open positions,” Konstanze Somborn told The Local on behalf of Siemens AG.

He added that Siemens operates in 190 countries. “That is why we value international teams very much…English as a common language is very usual.”

READ ALSO: ‘Which German companies want to hire foreigners?’

Similarly, BMW hires workers from a variety of backgrounds.

“Every year, we hire lots of internationals and welcome them to the BMW Group,” Dr. Hans-Peter Ketterl, a press spokesman for BMW Group told The Local.

But not all of these positions are available to non-German speakers.

Ketterl added that BMW’s working language is German in the country, even though, “English is an indispensable entry requirement as the second corporate language in many areas of the company.”

Check job boards and follow best practices

If it’s your first time applying for jobs in Germany, make sure to change your resume to the German format, even for English positions.

While Germany is home to its own job boards, like Xing, LinkedIn is probably the best place to start. In addition to searching for positions based in your preferred location, you can check relevant groups, like Munich Startups, to broaden your horizons.

The English Jobs in Germany website is also a good resource to start with.

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