Rising racial tensions cost German businesses skilled foreign labour

Chemnitz faces xenophobia as skilled foreign workers leave due to discrimination, impacting economy and social cohesion.

Manager Joerg Engelmann says he has pulled out all the stops to attract skilled foreign workers to his chemical engineering company in Chemnitz, east Germany. But once they arrived, the racial slurs and exclusion they experienced in the town have driven some of them away.

His firm is one of five German medium-sized companies that told Reuters their foreign staff recently moved on or switched locations due to xenophobia, even as Europe’s biggest economy suffers a shortage of skilled labour.

Many large companies in Germany and the Netherlands have expressed concern about the difficulty of hiring due to anti-immigrant sentiment. Some employers go a step further, saying they are actually losing staff because of it.

CAC Engineering GmbH, the family-owned company Mr. Engelmann runs, has lost around five of its 40 foreign employees over the past 12 months because of discrimination, he told Reuters.

“We do what we can. But we can’t become bodyguards,” said Mr. Engelmann, 57.

CAC did not give details, but xenophobic hate crime cases recorded across Germany by the interior ministry more than tripled between 2013 and 2022 to more than 10,000. Overall, Mr. Engelmann said, high energy costs pose a bigger challenge. Official German estimates suggest the country as a whole will be short of seven million skilled workers by 2035, compared with a labour force of around 46 million.

The climate is more hostile in eastern Germany, where after the fall of communism plant closures and layoffs saw an exodus of young people and a lower birth rate.