German Corporate Insolvencies Surge 23.1% in 2024 Amidst Structural Economic Pressures

Germany is currently facing a significant economic challenge, marked by a sharp increase in corporate insolvencies and widespread job reductions across various sectors. According to information service provider CRIF, corporate insolvencies in Germany rose by 23.1% in 2024, reaching 21,964 cases, the highest level recorded since 2015. This unsettling trend highlights a period of intense pressure for businesses nationwide.

The Halle Institute for Economic Research (IWH) further reported that the fourth quarter of 2024 alone witnessed 4,215 company insolvencies, impacting nearly 38,000 jobs, a figure not seen since the financial crisis of mid-2009. Experts project a continued rise, with forecasts suggesting up to 26,000 insolvencies in 2025. This surge is primarily attributed to persistent high energy costs, ongoing supply chain disruptions, geopolitical uncertainties, and elevated interest rates, all contributing to a fragile business environment.

Several long-established German companies, known as "Traditionsunternehmen," have recently succumbed to these pressures. Circular knitting machine manufacturer Mayer & Cie. (founded 1905) filed for insolvency in self-administration on September 23, 2025, citing a substantial 50% slump in sales due to global trade conflicts, the war in Ukraine, and intense competition from lower-cost Chinese manufacturers. Similarly, the Brüder Schlau group (founded 1921), which operates the Hammer and Schlau retail chains, filed for insolvency in June 2025, with plans to close approximately 50 wholesale markets and affecting 3,900 employees, due to increasing online competition and rising operational expenses. Garden mail-order company Gärtner Pötschke (founded 1912) also entered its third insolvency process since 2019, following the financial collapse of its parent company.

Retail giant Galeria, with roots dating back to the 19th century, narrowly averted collapse after filing for insolvency for the third time in January 2024, a direct consequence of its parent company, Signa Holding, entering insolvency. New investors have since stepped in, planning to keep over 70 of its 92 stores operational. Velina Tchakarova underscored the broader implications, stating in a recent tweet, "> The crisis of Germany’s “Traditionsunternehmen” shows that heritage alone is no shield against the comprehensive structural pressures of high energy costs, digital disruption, and global competition."

Beyond insolvencies, major industrial players are also implementing significant workforce reductions. Bosch plans to eliminate up to 1,200 jobs in its software and electronics division and 1,500 in its Mobility division by 2026, driven by slower market adoption of automated driving and the industry's shift towards electromobility. Thyssenkrupp's steel division faces cuts impacting a "four-digit number" of jobs, potentially up to 13,000 positions, as it grapples with high energy costs and competitive imports. Continental has agreed to cut 1,200 jobs at its German tire plants as part of a larger restructuring that will see over 5,500 global reductions by 2025. Additionally, ZF Friedrichshafen announced plans to reduce up to 12,000 jobs worldwide by 2025, including 6,000 in Germany, as it navigates the automotive industry's profound transformation.

These widespread struggles across German businesses signal a profound economic challenge. As Ms. Tchakarova observed, "> What is currently happening in Germany will have significant ripple effects on whole of Europe." The confluence of high energy costs, rapid digital transformation, and fierce global competition is compelling a fundamental restructuring of the German economy, impacting both its cherished legacy businesses and its leading industrial enterprises.