More Companies Surviving, but Workers Suffering: Insolvencies Decrease in Germany Yet Job Losses Increase
More corporate insolvencies fewer job losses in Germany
Facebook Twitter Whatsapp E-Mail Print Copy Link Germany's corporate bankruptcies have seen a downward trend in May, yet the number of affected employees has risen, according to a recent study. The Halle Institute for Economic Research (IWH) reported a decrease in insolvencies by 9% compared to the previous month, but a 17% increase from the same period last year and a whopping 53% surge from the average May rates of 2016-2019. Steffen Müller, head of IWH insolvency research, explained that this decrease doesn't mean we've seen the last of corporate bankruptcies in Germany.
In May this year, 15,000 jobs were on the line in the top 10% of insolvent companies - a 7% increase from the previous month, 27% higher than May 2024, and shockingly 130% above the May average of 2016-2019. A study by credit insurer Allianz Trade demonstrated that large insolvencies have been rampant lately, with the insurer expecting an 11% spike in insolvencies to around 24,400 cases this year, and a further 3% increase to 25,050 in 2026.
As for the specific year 2021, the search results don't provide data, but the general economic climate during that time indicates a period of instability due to the COVID-19 pandemic. This increased job loss among fewer bankruptcies could be attributed to companies restructuring or downsizing as a survival tactic in challenging economic times. Larger firms or those with a higher number of employees might be more likely to be involved in insolvencies, thus impacting a greater number of employees.
Regardless, even a decrease in corporate bankruptcies doesn't spare the workforce, as companies may still need to lay off employees to save costs and stay competitive. Keep an eye on the economic horizon, as uncertainty remains for Germany's businesses and the employees who depend on them.
Source: ntv.de, rts
The community might want to be vigilant about job losses within insolvent companies, despite a decline in corporate bankruptcies, as demonstrated by the data from Germany in May 2021. The need for vocational training programs could increase in politically unstable economic climates, such as the one caused by the COVID-19 pandemic, to help employees acquire new skills and potentially re-enter the job market.
