Disruption Puts Companies Under Enormous Pressure

The global economy is being shaken by numerous crises. In addition, digitalization continues to exert significant pressure for change. German executives believe that their companies are disproportionately affected by disruption.

In view of the multiple challenges facing the economy, a wave of layoffs appears to be rolling toward Germany. In an economic survey conducted by the Cologne Institute for Economic Research (IW) (source in German), 35 percent of the companies surveyed stated that they expect job cuts in 2025. Corresponding announcements have already been made by Deutsche Bahn, Thyssenkrupp, Deutsche Post, and ZF, among others.

Job Cuts Despite Labor Shortage

The Disruption Index 2025 published by consulting firm Alix Partners also points in this direction: although there is much talk of a skills shortage in Germany, the analysis shows that 40 percent of German executives are considering downsizing their workforce as a result of disruption. Globally, the figure is 34 percent.

The European average is only in the upper 20 percent range. The other results of the analysis also confirm the challenges facing the global economy.

Two-thirds of Decision-Makers Complain of “Disrupted” Business

The Disruption Index for Germany has risen by six points compared to last year to 74, putting it one point above the global average for the first time in three years. In the survey, two-thirds of international decision-makers said their business had been severely disrupted.

Three-quarters of the executives surveyed worldwide also believed at the time of the survey in the fall that new tariffs would require adjustments to their business strategies by 2025. At the same time, an average of 40 percent said they were planning significant changes to their business models for 2025. In Germany, this figure was as high as 43 percent.

Automotive Industry in Global Upheaval

One possible reason for this is the automotive industry, which has been severely disrupted worldwide and is a key economic factor in Germany. It is suffering in particular from Chinese competition in the electric vehicle sector, stricter emission limits, protectionism and tariffs, rising material and energy costs, and disrupted supply chains.

This is hampering competitiveness and creating pressure to act – but by no means only in this industry and not only in Germany. According to the index, the media and entertainment industries and the telecommunications sector are the most affected by disruption alongside the automotive industry. The shortage of skilled workers is also causing problems in many industries. And the issue of productivity is also preoccupying companies worldwide.

Disruption as the New Normal

Nevertheless, according to the Disruption Index, the majority of executives surveyed are optimistic that they will be able to overcome the challenges. AI, automation, and robotics in particular are seen as growth drivers that offer opportunities to increase productivity and profitability.

The very best performers, however, are now moving beyond simply managing disruptive circumstances and are instead embracing and harnessing them. For example, they are leaning into AI and digital technology like never before, recognizing it as more than a tool to drive efficiency, but rather as an important productivity enabler that augments human intelligence to drive growth.“ Simon Freakley, Executive Chairman, Alix Partners

According to the analysis, companies in Germany and Switzerland, for example, have been able to generate growth over the past twelve months despite disruptive developments by integrating and using digital tools. Switzerland is also relying comparatively frequently on mergers and acquisitions as a growth strategy for the next three to five years.

This is a partly automated translation of this german article.