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Germany's Tech Layoffs: Where Did the Jobs Go? (2024/25)

Summary

Quick Abstract

Is Germany losing its edge in the tech world? This summary dives into the shifting landscape of the German tech industry, exploring recent tech layoffs (over 12,000 in 2024 alone), economic stagnation, and why tech talent is seeking opportunities elsewhere. We'll examine the factors contributing to this trend, including high costs, regulatory hurdles, and evolving skill demands. Discover what this means for your tech career.

Quick Takeaways:

  • Germany's tech sector is facing post-pandemic turbulence and significant layoffs, impacting both startups and established firms.

  • Companies are increasingly outsourcing roles to Eastern and Southern Europe, and India, seeking lower labor costs.

  • Rising costs of living and regulatory uncertainty make Germany less attractive for some tech investments.

  • While specialized skills in areas like AI, IoT, and cybersecurity are in demand, traditional roles are being outsourced.

  • Freelancing and entrepreneurship are on the rise as tech workers seek flexibility and autonomy.

Germany still offers opportunities in high-demand specialties like emerging tech, and boasts world-class education. But rapid salary growth is unlikely, and the high-growth startup energy is diminishing.

Introduction

Germany, renowned as the automotive powerhouse and engineering marvel of Europe, is currently facing a significant loss of tech talent. While social media often focuses on US tech layoffs, Germany has lost over 12,000 jobs in 2024 alone. The country's economic engine is stalling, with manufacturing in decline for two consecutive years. This video series is aimed at tech professionals already living and working in the US, Canada, the UK, or the European Union. If you're based outside these regions or in an outsourcing-heavy market, the data in this video may not apply to your situation.

Tech Scene and Culture

  • Germany's tech industry has been one of the most affected in Europe by post-pandemic turbulence and layoffs over the past three years.

  • Prior to COVID, Germany emerged as a major tech hub in Europe, with a large number of startups and traditional firms having significant tech labs.

  • Since the pandemic, investment priorities and volume in Germany have shifted, and changes in work culture have reshaped the tech ecosystem.

  • More than 12,000 tech jobs were cut in 2024 alone, which is a significant number for Europe, although much lower than the US figure of 150,000.

  • Major German employers have laid off thousands of workers in response to falling profits and a challenging post-pandemic economic landscape.

  • The German manufacturing PMI was 48.4 in April 2025, below the 50 mark that indicates expansion.

  • Germany has had two consecutive years of negative economic growth, with GDP contracting.

Reasons for Talent Fleeing

  • High Cost Structure and Labor Laws: Germany has strict labor protection laws and relatively high wage expectations, making it expensive for companies to maintain large local tech teams compared to lower-cost European destinations.

  • Salary Expectations and Cost of Living: The rising cost of living in Germany, especially in high-cost cities like Munich, drives tech professionals to seek high and competitive compensation. Many tech companies, especially startups, cannot afford to meet these expectations.

  • Regulatory and Policy Uncertainty: Germany's increasingly unpredictable regulatory and tax environment, along with complex bureaucracy, makes it less attractive for tech investment and expansion compared to more agile European markets.

  • Shift in Skill Demand: The types of skills that German tech companies are looking for have evolved. Emerging tech such as machine learning, data science, IoT, and blockchain are in demand, and job seekers whose expertise does not align with these areas find it harder to land offers.

Comparison with Sweden

  • Germany and the UK have been the hardest-hit countries in Europe for tech layoffs since 2022, with between 12,000 and 19,000 jobs lost.

  • Sweden experienced a sharp spike in layoffs at the start of the pandemic, with approximately 27,000 jobs cut across all sectors, including tech.

  • The tech sector's layoffs in Sweden were smaller in scale and shorter in duration compared to Germany.

  • Sweden has the highest reemployment rate in the developed world, with more than 80% of laid-off workers finding new jobs within a year.

  • By 2024 and 2025, Sweden's tech industry recovered much better than that of the rest of Europe, with high demand for specialized talent and a thriving startup and innovation ecosystem.

Quality of Talent

  • German tech talent is highly educated, and education in Germany is of very high quality and affordable, as public universities charge little to no tuition fees.

  • Germany has a strong startup ecosystem, with cities like Berlin, Munich, Hamburg, and Frankfurt being major tech hubs.

  • Berlin is Germany's top startup hub, home to unicorns like Zelando, N26, Delivery Hero, and several autonomous driving startups.

  • Munich combines a strong industrial base with a thriving startup scene and is known for IoT, advanced manufacturing, robotics, and traditional software development.

  • Hamburg is gaining recognition as a top tech city, ranking second in the 2024 talent city index after Berlin, and is known for Zing, gaming companies, and Statista.

  • Frankfurt is Germany's financial and data infrastructure hub, handling about 25% of Europe's internet traffic, and is known for fintech, security, cloud computing, and a robust startup ecosystem.

Trends in Germany

  • Freelance Boom: There is a marked increase in tech workers opting for freelancing and independent contracting in Germany, with over 4 million freelancers, a significant number of whom are in IT, media, and consulting.

  • Rise in Entrepreneurship: The aftermath of layoffs, people seeking non-traditional employment, and the shift towards remote work have led to a rise in entrepreneurship, especially among the youth.

  • Shift Away from Traditional Hubs: As companies relocate or downsize in Berlin and other major tech cities, tech talent is dispersing to smaller towns in Germany and abroad.

  • Sectoral Spread: With tech roles moving offshore, remaining German offices are increasingly focused on business, sales, and German-speaking functions, while technical and product roles are consolidated elsewhere.

The Vibe of German Tech

  • The German tech scene is similar to the cars it produces, being sturdy, durable, and reliable.

  • It fully embraces innovation coming from the US or China and sets its own standards in industrial and applied tech.

  • Germany is struggling to stay competitive in manufacturing against China, which has a significant impact on the country's economy.

  • As of 2025, German tech is still a solid place for tech in Europe if you are in a high-demand specialty, but it is not the same as it was 10 years ago.

Cost of Living

  • The cost of living in German tech hubs varies, with Munich being one of the most expensive cities.

  • Salaries for senior data scientists and product managers in Berlin range from €84,000 to €110,000 and €91,000 to €125,000, respectively, with median salaries of just short of €100,000 and €102,000.

  • Salaries in Munich are similar, but the cost of living is much higher.

  • Salaries in Hamburg are lower, and the cost of living is also lower.

  • Salaries in Frankfurt are similar to Hamburg, but the cost of living is slightly higher.

Conclusion

  • Germany is a good idea for tech professionals if you live in Germany already and want to stay within the European Union, are in emerging tech, fintech, or IoT, are a specialist in a high-demand area, want access to world-class universities and low-cost education, or prefer working in a country where English is commonly spoken in the tech scene.

  • Germany is not a good idea if you're hoping for rapid salary growth, are looking for high-growth startup energy like in the US, are in a role that is increasingly outsourced, or are coming from the US or Canada expecting a drastic quality of life upgrade.

Next up in the video series is the United Kingdom.

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