Slashing Jobs in Dax: A Grim Quarter for German Giants, but Germany's Economy Shines
The Dax Shuffle
- In 2025's first quarter, the Dax index saw a boost, touching new records. Despite some market hurdles, it stood resilient due to optimism surrounding trade tensions easing and positive economic data[2][3].
The Dax Disappointment
- Despite the overall Dax gains, ten companies reported a drop in revenue, with heavyweights like BMW, Mercedes-Benz, BASF, and Bayer among them[1]. Their operating profits also took a nose dive, with sixteen companies seeing a decrease compared to the previous year[1].
Welcome to the Chopping Block
- The job market saw its share of pain, too. Plain and simple: 32,000 jobs were cut across the Dax companies, taking the total workforce down from 3.2 million to 3.17 million[1]. Twelve out of 27 companies with job data shared slashed their workforce sizes[1].
Bracing for the Economy
- EY CEO, Henrik Ahlers, commended the Dax companies for their resilience amidst a challenging economy and tricky political conditions[1]. But, the trade wars between the US and its trading partners seemed to have escaped the Dax's ledgers for now[1]. Companies had boosted their US stocks in anticipation of tariffs, while customers had made quick purchases to cash in on lower prices[1]. The full brunt of the trade tensions will likely show up later in the year.
Backdraft and Bleak Forecast
- EY reckons further job reductions are in the offing. Many bigwigs have planned aggressive cost-cutting measures, which portend more job cuts[1]. In other news, SAP has reported improved profits after recent layoffs, even as it grapples with economic uncertainties and policy changes[4].
Enrichment Data
- Easing global trade tensions and favorable economic data bolstered Dax's overall performance[2][3]. Economic reforms and positive data suggested a potential economic boom[3]. However, increased profits from job cuts could have broader economic implications if widespread[4]. Economic stability and reforms promise a cautious yet optimistic outlook for the German economy[1][4].
Reduced collective earnings of DAX companies – 32000 positions eliminated - Decrease in total profits for Dax companies results in loss of 32,000 jobs
Finance ministry in EC countries should closely monitor the employment policies of major businesses, considering the significant job cuts reported by German giants in Q1 2025. The decrease in employment could potentially have broader economic implications if widespread, as seen with SAP's improved profits after recent layoffs. Businesses in these countries should focus on sustainable employment policies to ensure economic stability and growth, rather than relying on cost-cutting measures that may lead to job losses.
