Companies Shift Tens of Thousands of Jobs Abroad - German Firms Relocate 71,100 Jobs to Europe, Cutting 50,800 Domestic Positions
New data has revealed a significant shift in German business operations between 2021 and 2023. Over 1,300 companies with at least 50 employees moved parts of their business to Europe, impacting thousands of domestic jobs. The findings come from the first release of a statistical survey on global value chains.
During this period, 71,100 jobs were affected by relocation, resulting in a net loss of around 50,800 positions in Germany. The manufacturing sector saw the largest impact from these moves.
Lower labour costs were the main reason for offshoring, cited by 74 percent of firms. Another 59 percent mentioned other cost advantages, while 38 percent pointed to domestic labour shortages as a factor. Strategic decisions also played a key role, with 62 percent of companies considering them important.
Most relocations occurred within the EU, where 900 firms shifted operations. Another 700 moved jobs to non-EU countries, particularly in Asia, with China being a major destination. The Asia-Pacific region, seen as a future market for chemical industry investments like BASF, attracted firms due to growth prospects.
Despite these moves, 59 percent of companies with 50 or more employees remained part of global value chains in 2023. They either sourced goods and services from Europe or supplied them to foreign markets. However, legal hurdles, tax issues, and concerns over relocation costs were still seen as major obstacles to moving operations overseas.
The survey highlights a clear trend of German companies shifting operations to Europe, driven by cost savings and strategic goals. While the EU remains the top destination, Asian markets are gaining importance, particularly for industries like chemicals. The net job loss in Germany reflects the broader impact of these relocations on the domestic workforce.
