German companies cut jobs in bid to become more competitive

Thousands of jobs will go in Germany after General Motors (GM) and retailers Spar and KarstadtQuelle announced a swathe of personnel cuts.

Industry analysts said that the job losses showed that German companies were restructuring to cut labour costs and make businesses competitive.

GM said it would cut around 10,000 jobs at its Opel operation to stop heavy losses in Europe and save $500m. Trade unions have called for a ‘day of action’ on Tuesday to fight the cuts.

KarstadtQuelle announced 5,500 jobs would go to save $750m, although trade unions have secured an agreement that there would be no compulsory redundancies.

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Meanwhile, Spar plans to 1,000 jobs in its wholesale operation as part of a restructuring package aimed at saving $70m.

Holger Schieding, economist at the Bank of America, told the Financial Times that German restructuring was “proceeding faster than anywhere in core Europe”.