Labor market: “800,000 jobs will be lost in Germany due to AI”

In an interview, Andrea Nahles, head of the Federal Employment Agency, pushes for the rapid introduction of a work-and-stay agency for foreign skilled workers. AI does not reduce work across the board.

Head of the authority Nahles: “The economic downturn is now affecting the training market nationwide.” Photo: Daniel Löb/dpa

Ms. Nahles, artificial intelligence (AI) is currently massively changing the world of work. Do you see more opportunities through AI – or does it ultimately destroy jobs?

We predict that around 800,000 jobs in Germany will be lost due to AI in the next 15 years, but a similar number will also be created. Some sectors will be hit harder by the cuts, such as service providers for companies, analytical jobs at insurance companies and banks. I would still like to see more investment in AI in Germany - but only if it brings productivity, not because it's chic.

You talk about “analytical jobs”. Does the reduction particularly affect highly qualified people?

Not across the board. In the USA there was a shock study about young academics. Here too, academics take longer to start their careers and may not get their dream job - but they still have far better chances than everyone else. However, not all of this is due to AI. The weak economy plays a particularly important role here. On the other hand, professions that can use less AI, such as crafts, prove to be quite robust.

To what extent?

AI can also change craftsmanship, but the core of the work remains human craftsmanship. Even semi-skilled and unskilled people still have opportunities because it is sometimes not worth replacing them with AI. But the same applies here: In principle, no one is immune anymore.

The Minister of Labor has announced free AI courses for everyone. What role does AI play in BA qualifications?

For about a year and a half there has been a clear trend towards digital further training, and increasingly towards AI. According to surveys by our Institute for Labor Market and Occupational Research (IAB), one in four companies will be using AI by 2025. And there are more. Many people set up learning times: at SAP, for example, everyone has two hours per week for this. The BA supports companies in this transformation with qualification offers. Because if you don't feel competent, you won't take advantage of the new opportunities.

Vita Andrea Nahles

The 56-year-old German scholar spent almost her entire professional life in politics. She was head of the Juso, general secretary, parliamentary group and party leader of the SPD, sat in the Bundestag for almost two decades and headed the Federal Ministry of Labor and Social Affairs from 2013 to 2017. During this time, she introduced the statutory minimum wage of 8.50 euros per hour as well as the mother's pension and the pension without deductions after 45 years of contributions ("pension at 63"). Nahles is the mother of a daughter and lives in the Eifel.

After leaving politics, Nahles became President of the Federal Post and Telecommunications Agency in 2020 at the suggestion of then Finance Minister Olaf Scholz. Since 2022, the woman from Rhineland-Palatinate has been at the head of the Nuremberg Federal Employment Agency (BA), which employs around 120,000 people nationwide. The BA's administrative board recently proposed to the federal government to extend its contract until 2032. The federal government usually follows the suggestions of the board of directors.

On November 20th, Gen Z wants to demonstrate again, also against poor job prospects. This year only four out of ten applicants received a training place.

I warned as early as 2025 that the situation for young people would worsen, but that was of little interest. Now the situation is worse than it has been for a long time. The number of registered apprenticeship positions has been falling for three years; this year it is six percent, i.e. 31,000 positions fewer. At the same time there are more applicants. Of course, this varies depending on the region. But the economic downturn is now hitting the training market nationwide.

All economic forecasts point upwards. When will this arrive on the job market?

Probably not before summer 2027. The uncertainty is reflected in the reported vacancies: there is no upward movement yet. Even if the recovery stabilizes at the beginning of the year, it will take six months before it reaches the labor market. First, companies wait for more orders and increase overtime accounts. Things are only getting a little better in construction, as the federal government's infrastructure programs seem to be making an impact.

We finally need the promised work-and-stay agency that makes us competitive with other immigration countries

What worries you more in the medium term, unemployment or the shortage of skilled workers?

For the time being, unemployment has risen by 24 percent since 2022, or 580,000 people. After all, the number of long-term unemployed and those receiving basic benefits are now falling. But in five years it will definitely be a shortage of skilled workers. I would warn against underestimating the coming mega-problem in view of the almost three million people who are currently unemployed. There are already far too few skilled workers coming to us and too many are leaving. EU foreigners in particular can find good conditions elsewhere.

60 years ago, Germany concluded the recruitment agreement with Turkey, which contributed massively to the economic miracle. Do we now need a new recruitment offensive for specialists from non-EU countries?

Due to demographics, the German labor market is losing around 500,000 net workers per year. Decades of immigration from Europe are no longer effective because there is a lack of young people everywhere. Net immigration is currently lower than it has been for a long time. That’s why we also need to attract skilled workers from countries outside the EU. To do this, we finally need the promised work-and-stay agency that will make us competitive with other immigration countries. We have to become more modern, more digital and faster. This requires the courage to find a central solution.

Collective bargaining

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The government announced such an agency in the coalition agreement. Who is braking? Is the Interior Minister being cautious because this doesn’t fit with the “migration transition”? Or countries like Bavaria that believe they can do better on their own?

I am disappointed that the 550 immigration authorities nationwide are apparently primarily intended to be protected. But they were never intended to be a welcome center for international specialists. They're doing a good job, but that's not what we need to compete with Canada. It seems to me that the promised work-and-stay agency is being chopped up, especially in German federalism.

At the national level, the BA has created new “labour market hubs” that place people from crisis-hit companies directly into booming companies. How many are there now?

In spring 2025 there were 30, now 141, and the trend is rising, especially in the metal and automotive sectors, where there are mass layoffs. In terms of quality, they work best when they operate within a tariff range. But in Stuttgart, for example, we are also organizing a hub from industry to trade, which is looking for a lot of people in the south. The numbers are not high, but it works.

Social reforms

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How can the trade score points with IG Metallers who earn much more?

For example, with regional proximity and the elimination of night shifts. We recently had an unemployed trained painter who had worked in an industrial company. He is now considering going back to his old job. And this despite the fact that he accepts a significant loss of income. But he does it because he is over 50 and wants to get out of the night shift.

The economics minister says the hubs didn't work because people in the companies preferred to wait for severance pay rather than take on new jobs.

I don't know where she got the information from. We are currently evaluating the qualitative effect. But if they didn't work, there wouldn't be more and more of them. We only do this at the request of the company and the works council. In the companies, social plan negotiations, transfer companies and labor market hubs run parallel, because in some cases tens of thousands of employees are involved. The coalition's plan to tax severance pay less when people take on a new job is exactly right. This puts the incentive in the right place. It would be nice if that came soon.

Despite the economic downturn, we are able to place Ukrainians and those entitled to asylum disproportionately well

Because more and more ex-industrial workers are receiving high unemployment benefits, your company is accumulating billions in debt. How high will the deficit be?

The deficit will remain at ten billion euros at the end of 2026 - driven solely by unemployment. We expect eight to 8.5 billion for 2027.

Where does the money come from? Do you want it given to you by the federal government?

We will receive a loan of eight billion euros for 2027. We spent our previous reserves of 26 billion euros during the Corona period to stabilize companies and support employees. This is precisely why it is legitimate for the state to help us with loan forgiveness or federal subsidies by 2028 at the latest.

Do you expect Berlin to increase unemployment contributions to raise more money?

We don't know anything about this.

Comment

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Will the stricter basic security rules bring more people into work?

The number of able-bodied recipients of basic security has been falling since the beginning of 2026. We are demanding more from people and making more offers. Despite the economic downturn, we are able to place Ukrainians and those entitled to asylum disproportionately well. What additional benefits the change from citizen's benefit to basic security has brought since July 1st will only become apparent in spring at the earliest.

The Chancellor wanted to save tens of billions by abolishing citizens' money. Are we far from that?

I was wondering about that. You save money when you put people to work. This is what we are doing: Last year alone we were able to place 64,000 more Ukrainians than in 2024.

What does the BA itself contribute to saving? Your workforce has grown by around 20,000 to 115,000 positions in 20 years - despite the trend of falling unemployment and digitalization.

We are subject to the two percent savings target for personnel and we are implementing that. In the core business of unemployment insurance, the number of employees fell steadily between 2010 and 2020. But we have added a variety of tasks, such as recently vocational training and rehabilitation for basic social security recipients. We need 1,000 more people for this alone. 80 percent of our tasks are mandatory, but we are still presenting an austerity budget to our board of directors this week.

The digitalization of the BA is considered groundbreaking – surely that should also save money?

We have had an automation agenda since 2024. We are reducing positions that become available through digitalization - a total of 7,800 are planned by 2032.

Related topics

GermanyEuropean UnionLabor marketEuropeAndrea NahlesSkills shortage

If you had one wish for the new Labor Minister Alexander Schweitzer – what would it be?

He should advance the digitization of social administration - together with the Digital Minister. Citizens should only have to enter their data once and not over and over again. Keyword: “once only”. We as BA have already prepared a lot. So far, however, there are few authorities that can go along with this.

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