New sales low: business figures of German ICT companies remain poor
Turnover in the ICT sector tended to decline in the first quarter of 2025. Service providers are more positive about the future than hardware manufacturers.
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The German ICT sector continued to record declining sales in the first quarter of 2025. This is according to an industry report by the Centre for European Economic Research (ZEW). Compared to the last quarter of 2024, almost 41% of companies reported a decline in turnover, while around 32% of companies reported growth. This trend is primarily attributable to service providers, which reported comparable figures. The figures for hardware manufacturers are less negative. Here, around 36% reported declining and 35% increasing sales. The distribution of demand is similar.
According to the report, there are clear differences in expectations for the current quarter. Around 42% of ICT service providers expect sales to rise, while 19% expect business to decline. In contrast, only around 18% of hardware manufacturers expect sales growth, while 28% anticipate declining figures. The remaining companies expect turnover to remain the same. Here, too, there is a similar distribution in terms of expected demand for their products and services.
Jobs: Service providers more optimistic than hardware companies
In the first quarter, around 46% of ICT companies reported a constant number of employees. Around 29% of service providers reported job cuts, while just under 26% employed more staff. In contrast, around 37% of hardware manufacturers laid off employees, while only 17% hired new staff. For the current quarter, 38% of service providers expect additional jobs, while 22% anticipate redundancies. In contrast, only around 13% of hardware manufacturers expect to be able to create new jobs, while 27% anticipate job cuts.
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In addition to the economic situation, job opportunities in IT companies are also linked to the use of artificial intelligence. Large tech companies such as Microsoft recently laid off thousands of employees due to AI-related restructuring. Payment service provider Klarna also cut numerous jobs in customer service, but is now realizing the limits of AI. Meanwhile, one in three companies in Germany is currently planning redundancies. Meanwhile, around three quarters of companies would like to employ AI agents as digital workers in the future.
(sfe)
