Large companies around the world are preparing for a sustained economic headwind and are planning to make significant cuts to their workforce. Globally, 36% of companies are planning to cut staff – in Germany, 26% of CEOs are planning to reduce the number of jobs. These are the findings of the latest "CEO Survey" by management consultants EY, a survey of 1,200 CEOs worldwide – 100 of them in Germany.

According to the survey, one in four companies worldwide (24%) and 15% of German companies are planning a hiring freeze. Instead of permanent employees, 38% of companies worldwide and 42% of German companies are also increasingly relying on temporary and hourly workers.

Companies from Germany in particular are preparing to find it increasingly difficult to pass on their high costs to customers in the future: In the survey, 35% of German CEOs and 20% of CEOs surveyed worldwide stated that they feared they would no longer be able to pass on their high expenses – for example for energy and raw materials – to their customers. The result will be falling profits and margins.

CEOs are also concerned about slower economic growth in key markets: 22% of respondents worldwide and 19% of German managers see weak economic development as the biggest obstacle to maximizing sales and profitability in 2024.

"The wind is blowing ever harder in the faces of CEOs," observes Constantin M. Gall, Managing Partner and Head of Strategy and Transactions at EY in Western Europe. "The extraordinary situation of the pandemic and delivery problems, which gave companies record-high margins in some cases, is over. We now have a mix of a sluggish economy, persistently high inflation, political crises and armed conflicts. More and more companies are cutting back. This also means that there will be major cuts in personnel."

This also includes cost-cutting measures such as suspending pay raises or reducing bonuses – planned by 28% (worldwide) and 29% (Germany) of companies respectively. Only 9% of German companies and 7% of companies worldwide are not planning any cost-cutting measures in the personnel area. "In the past decade, the trend in employment at most large companies was clearly upwards," says Gall. "This is now over. On the one hand, the general economic situation is really worrying. On the other hand, the progressive introduction of AI technologies offers the opportunity to further supplement human labor with intelligent technology in the future. Successfully mastering this transformation requires a paradigm shift in the design of tasks and the qualification of employees." 99% of the large companies surveyed are currently planning major investments in generative AI.