Due to the crisis

Metal industry to cut up to 8500 jobs this year

The crisis is reflected in the employment figures.

(Bild: stock.adobe.com/©Konstantin Z - stock.adobe.com)

Thanks to a two-year agreement, the metalworking industry will be spared tough wage negotiations this year. At the same time, the number of employees is falling. 8,500 employees are likely to be affected and lose their jobs this year. Every second company is in the red.

"The recession in our industry has deepened," says Christian Knill, Chairman of the Metal Technology Industry. Production fell by ten percent in the first half of the year. Incoming orders also fell again, having already slumped by 18% in 2023. A third of metal technology companies also work as suppliers to the automotive industry. The crisis affecting German vehicle manufacturers is having a massive impact.

4000 employees affected in the 1st half of the year alone
Due to the poor situation, more and more companies are also turning the screw on personnel costs and cutting jobs significantly. In the first half of the year alone, 2000 employees lost their jobs, plus 2000 temporary workers. At the same time, companies abroad cut over 5000 jobs. By the end of the year, we can expect up to 8500 job cuts. Knill emphasizes that "personnel measures do not happen overnight".

Industry spokesperson Christian Knill: "Personnel costs are galloping away."

(Bild: APA/HELMUT FOHRINGER)

Personnel costs are galloping away
"The high personnel costs are a huge competitive disadvantage for Austria. Collectively agreed wages are galloping away in a European comparison," emphasizes Knill. Over the past 15 years, labor costs in Austria have risen by almost 60 percent, compared to "only" 41.7 percent on average in the eurozone. Last year, wages in Austria rose more than twice as much as in the EU and three times as much as in Germany. The increase in Austria is around 8.9 percent, compared to 2.9 percent in Germany. In addition to high wage costs, Knill sees bureaucracy as the biggest brake on growth.

In view of the upcoming elections, the industry is therefore in favor of a 25% reduction in bureaucracy. They are also in favor of lower non-wage labor costs and an increase in the investment allowance. This should rise to 15 percent for everyone. 

No tough collective bargaining negotiations this year
Although the next fall wage rounds are traditionally due in the fall, this year there will be no tough struggle for new collective bargaining agreements. In 2023, an increase in wages and salaries of rolling inflation plus one percent was agreed for this year, which is likely to be just under five percent this year.

With a "competition and employment protection clause", companies that are in particular difficulties can be granted an exception that allows them to increase wages by less. "That will be more companies this year, as the figures are even worse," says Knill. Around 30 percent want to apply for this clause. Last year, around one in ten companies used the clause and paid less. In general, the industry representative is in favor of continuing to rely on two-year contracts in the future, as these provide more planning security.

Even though there has recently been talk of a slight recovery in the industry, entrepreneurs in the metalworking sector are not very optimistic: according to the survey, around 80 percent believe an improvement in the second half of the year is unlikely. Production is likely to fall by nine percent compared to the previous year. "We are not noticing anything of an upturn," regrets Knill.