Skills shortage in machinery despite job cuts

Two headlines from the same industry, in the same year. One: German mechanical engineering cut around 22,000 jobs in 2025, the metal and electrical industry around 60,000 in total. The VDMA forecasts ±0 percent production growth for 2026; capacity utilization stood at 77.8 percent in April against an average of 85.6 percent.

The other: 123,000 positions unfilled in German mechanical engineering, up 18 percent year on year. The vacancy rate is 11.5 percent, and a job advert stays open for a median of 106 days.

Both are true. And both happen inside the same company.

Why the contradiction is not one

Cuts happen where the business cycle bites: in production, in administration, in project-dependent roles. Hiring happens where the shortage is structural: in service, in maintenance, in commissioning.

The economic reason is well documented. According to Deloitte, service in mechanical engineering typically delivers 30 percent of total profit, and 50 percent or more on maintenance-intensive equipment. While the new machine business stagnates, service is the line that carries – and the only one companies keep investing in during a weak year.

A company running short time in production while hiring two service technicians is therefore not behaving contradictorily. It is behaving correctly.

What that means for workforce planning

First: the vacancy does not disappear with the business cycle. It is tempting to assume a weak year loosens the labor market. For engineers and commercial roles that may hold. For service technicians, machinists and automation electricians it does not, because demand there is not tied to incoming orders but to the installed base at customer sites – and that does not shrink.

Second: the cuts sharpen the shortage elsewhere. Cutting production staff also loses people who would have become service technicians in two years. Internal supply into service roles dries up exactly when it is needed most.

Third: competition gets harder, not softer. Companies that cannot grow in new equipment grow in service – all of them at once, for the same people. A weak market year is a good candidate year for service technicians.

The communication mistake that follows

Companies cutting and hiring at the same time rarely communicate both in one sentence – understandable, but expensive. A candidate who has read about short-time work or job cuts at your company asks exactly one question: how secure is the role I am applying for?

Leave that unanswered and you lose applicants to companies nobody wrote about – not because they are safer, but because they are less conspicuous.

The answer is not reassurance but explanation: service is the line that carries, demand depends on the installed base, the role is permanent, and the team is growing while other parts of the business consolidate. That is verifiable and therefore credible.

The figures at a glance

What follows

If the shortage is structural rather than cyclical, the answer has to be structural too. A placement fee solves one role. A campaign solves one role. Both start from zero next time – in an environment where the next time is entirely foreseeable.

What an in-house system does about it is on the page for the in-house recruiting system.