Protectionist tariffs, Chinese competition and artificial intelligence deepen wave of layoffs in Europe

While high interest rate pressure and economic uncertainty continue across Europe, the protectionist tariffs imposed by US President Donald Trump and companies' turning to artificial intelligence under the influence of China's global export and industrial strategies are deepening the wave of layoffs on the continent.

European companies that want to maintain their global competitiveness find solutions in radical technological transformations and massive staff reductions in the face of high borrowing costs, intense competition from the Asian market, the effects of the ongoing Russia-Ukraine War and weakening domestic demand.

While transatlantic trade relations are experiencing one of the most troubled periods of the modern era, these macroeconomic pressures deeply affect many sectors, from automotive to pharmaceuticals, from technology to engineering, from aviation to banking.

The deepening contraction in the European labor market is a continuation of the comprehensive restructuring wave initiated by the continent's industrial giants in the last two years.

Due to the slowdown in electric vehicle transformation and increasing production costs, the German automotive company Volkswagen decided to part ways with its 100 thousand employees by 2030, and Bosch, one of the world's largest automotive suppliers, with more than 13 thousand employees.

Companies turning to artificial intelligence for cost advantage affects employment

The moves of companies that directly justify artificial intelligence and digitalization in their employment policies are fundamentally changing the workforce profile.

These steps of companies aiming to gain cost advantages, especially by replacing entry-level positions and administrative staff with artificial intelligence-supported software, point to a permanent transformation.

Recent surveys conducted by economic research institutes reveal that a significant portion of companies across Europe plan to shrink in employment in the coming period due to the use of artificial intelligence.

Experts emphasize that artificial intelligence technology has now turned into a basic rationalization tool for companies that both reduces costs and increases operational efficiency. Global economic uncertainties and the quest to rein in expenses lead many giant companies to reduce employment.

Employment reduction plans reveal that austerity policies have reached a structural dimension

According to the information compiled by the AA correspondent, Deutsche Bahn's employment reduction plans of 30 thousand, Thyssenkrupp's 11 thousand and automotive supplier ZF Friedrichshafen's employment reduction plans of up to 14 thousand reveal that austerity policies in European industry have reached a structural dimension.

Switzerland-based global logistics company Kuehne+Nagel announced that it will lay off 2 thousand people from its worldwide staff on March 3 due to overcapacity and the unpredictable cargo outlook created by geopolitical risks.

French automaker Renault announced in April that it would reduce its global engineering staff by 15 to 20 percent within two years, leaving 2,400 employees, and that it would take the low-cost models of Chinese manufacturers as an example in its operations.

British food and accommodation company Whitbread announced that 3,800 employees will be laid off across the UK and Ireland in April as part of a cost-cutting plan and restructuring of its restaurant network.

Romania-based energy company Complexul Energetic Oltenia announced that it will lay off 1,700 employees on April 29, in line with decarbonization and restructuring steps.

Damen Shipyards Mangalia shipyard operating in Romania announced that 1011 workers will be laid off on May 6 due to economic difficulties.

United Kingdom-based multinational bank Standard Chartered also announced that it will terminate 7 thousand positions in its global operations on May 19 in line with the transition to artificial intelligence and automation processes.

Germany-based insurance group Allianz Partners announced a employment reduction program that will affect 1,800 employees on July 8, citing the transition to artificial intelligence and automation systems in its operations.

Poland-based online food delivery platform Pyszne.pl (Just Eat Takeaway) announced that it will eliminate 5 thousand positions on July 16, in line with its operational downsizing and efficiency decision.

O2 Telefonica, one of Germany's leading telecom operators, announced that it will terminate the employment of 1,100 employees within the company and close 60 stores on July 18, in order to digitalize business processes and increase automation, and that the structural transformation will affect 1,400 positions in total.

UK-based telecommunications operator Vodafone announced that it will lay off 1,200 employees, including its European operations, on July 27 as part of its global restructuring plan. In addition, the company plans to lay off approximately 2,300 employees in Germany in the next two years.

French food services and facility management company Sodexo stated that it initiated a staff reduction process covering 1,100 employees on August 26 in order to increase operational efficiency within the scope of its restructuring strategy.

British bank Barclays announced on October 22 that it decided to part ways with 5 thousand employees globally in operations and back office processes by increasing its dependence on artificial intelligence systems.

German automotive supply company Schaeffler announced that 3,460 people will be laid off across Europe on November 3 due to the slowdown in electric vehicle transformation and decreasing profit margins.

Netherlands-based airline company KLM became the most recent link in this wave of employment contraction by announcing that it would lay off 1,000 employees in the first place in order to reduce operational expenses on November 5, citing difficult market conditions.