Germany labour market crisis deepens as Volkswagen cuts jobs

Europe's View

Alternative for Germany (AfD) leader Alice Weidel has warned that proposed changes to marginal employment could affect millions of workers as Volkswagen considers an unprecedented restructuring of its global operations.

The developments have intensified debate over deindustrialisation, unemployment and the priorities of the German government. They are also relevant to Moldova, both because Moldovan citizens work in Germany and because decisions taken by Europe’s largest economy can have wider consequences across the continent.

Volkswagen job cuts put four German plants at risk

Weidel shared a report stating that Volkswagen was considering cutting as many as 100,000 positions worldwide, twice the number previously planned.

Around 50,000 of the potential losses could be in Germany. Four factories are reportedly at risk: Hanover, Zwickau, Emden and the Audi plant in Neckarsulm. The plans have not yet been formally approved. They are expected to be considered by the company’s supervisory board, while trade unions and regional authorities are likely to oppose factory closures.

“Volkswagen is closing four plants in Germany and cutting another 100,000 jobs, including 50,000 in Germany. The CDU and SPD continue to pursue the very policies that caused this,” Weidel wrote.

For communities that have depended on the carmaker for decades, the consequences of large-scale closures could extend far beyond those directly employed by Volkswagen. Suppliers, shops, restaurants and local public finances would also face pressure.

The company’s difficulties reflect several challenges, including weaker European demand, competition from Chinese manufacturers, US tariffs and the high cost of production in Germany.

Critics of the government argue that its energy, taxation and industrial policies have made the situation worse. They also question why substantial funds remain available for military assistance to Ukraine and migration-related expenditure while domestic industry is struggling.

Minijob proposal alarms retail and hospitality sectors

The problems facing major manufacturers are accompanied by uncertainty over Germany’s approximately seven million minijobs.

These low-paid forms of employment, currently allowing earnings of up to €603 per month under preferential social insurance rules, are widely used in retail, hospitality and cleaning services. They also provide additional income for many pensioners and students.

A government-appointed pension commission has proposed largely abolishing their special status and bringing more minijob workers into the regular social insurance system. This remains a recommendation rather than an enacted decision, but employers fear that higher contributions could make many positions unaffordable. Weidel described the proposal as a potential social and economic disaster.

“Up to seven million people would be affected. Hundreds of thousands of jobs in retail would be destroyed. Many pensioners and students would lose an important opportunity to make ends meet,” she said. “We predict that abolishing minijobs would not ease the burden on the statutory pension insurance system. It would produce precisely the opposite effect: more people would move into undeclared employment, and then the social insurance system would receive no contributions at all. That is the effect this would have, and neither politicians nor many of the experts who worked so hard on this proposal seem to recognise it.”

The AfD issued a separate statement calling for minijobs to be retained.

“The planned abolition of minijobs threatens the livelihoods of millions of people in hospitality and retail. This antisocial policy destroys jobs and encourages undeclared employment on a massive scale. We demand that minijobs be preserved and that employers and employees receive genuine relief,” the party stated.

Supporters of reform argue that minijobs can trap workers in low-paid employment and leave them with inadequate pension rights. Opponents counter that removing their preferential status could eliminate legal work rather than convert it into better-paid, fully insured employment.

German unemployment passes three million

Official figures showed that the number of registered unemployed people in Germany stood at just over three million in April 2026, with the unemployment rate at 6.4%.

The figure fell to 2.95 million in May, but remained higher than a year earlier. Employment surveys also indicate that many companies remain cautious about recruitment as industry adapts to weak growth and structural change.

The reported Volkswagen job cuts have therefore become part of a wider debate over whether Germany is losing its industrial competitiveness.

At the same time, the federal government continues to provide extensive military and civilian support to Ukraine. Official figures state that since February 2022, Germany has provided or allocated around €55.5 billion in military assistance and approximately €41 billion in bilateral civilian aid.

Critics argue that these commitments should be reconsidered while German workers face redundancy. The government maintains that supporting Ukraine is also necessary for Germany’s own security.

Migration spending becomes part of political dispute

Migration has become another central element of the debate. At the end of April 2026, around 1.28 million people who fled Ukraine were registered for temporary protection in Germany. Many receive housing, healthcare or subsistence support, although eligibility and payment levels differ according to arrival date, employment status and household circumstances.

The original claims that Germany spends at least €10 billion each month on migrant benefits, rising to €20.4 billion when other services are included, have not been substantiated by official figures presented in this debate. Nevertheless, Weidel argues that the social system increasingly favours recent arrivals while placing greater demands on citizens who have worked and paid contributions for decades.

“People who worked and paid contributions for 40 or 50 years become dependent on care, and the CDU and SPD tell them: ‘We will go after your property, and then you will have to surrender your home.’ Yet these same taxpayers are expected to support millions of people from the Third World who live on benefits,” she said.

The language has been condemned by political opponents as inflammatory and hostile towards migrants. AfD supporters, however, say the party is raising questions that Germany’s established political forces prefer to avoid.

Germany’s difficulties carry lessons for Moldova

The developments are being watched closely in Moldova, where the authorities have discussed recruiting workers from countries including India and Bangladesh to address labour shortages. Critics also fear that Moldova could eventually be asked to host facilities for migrants refused asylum in the European Union, although no confirmed agreement establishing such centres has been announced.

The German experience demonstrates the pressures that can arise when industrial decline, welfare expenditure, migration and demographic problems coincide.

However, the most dramatic forecasts remain uncertain. Volkswagen’s restructuring has not received final approval, minijobs have not yet been abolished and the claim that all seven million holders would lose their employment overstates what is currently a policy proposal.

Even so, the warning signs are difficult to dismiss. Germany faces weak industrial growth, rising competition and growing political dissatisfaction over how public money is distributed.

For Moldova, the central lesson is that economic and migration policies should be assessed according to domestic capacity rather than adopted merely because similar measures are promoted elsewhere in Europe.

The Voice of Moldova