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Tech Sector Layoffs Sweep Across Europe
The European technology sector is experiencing a significant wave of layoffs in 2025-2026, with thousands of tech workers across the continent facing job losses as companies respond to economic pressures, restructuring needs, and the rapid adoption of artificial intelligence. According to recent data, more than 22,000 tech workers have been laid off in 2025 alone, with February seeing the highest single-month total of 16,084 cuts. The trend continues into 2026, affecting both established corporations and promising startups.
Major Companies Implementing Workforce Reductions
Several prominent European tech companies have announced substantial job cuts. In Germany, Continental is cutting 3,000 R&D jobs by 2026, while Porsche is eliminating 2,000 additional positions. Volkswagen's Cariad software division will lose 1,600 jobs. Siemens plans to cut 5,600 positions in its Digital Industries division, and Thyssenkrupp is reducing its workforce by 1,800. In the banking sector, Commerzbank is implementing 3,900 job reductions by 2028, and Santander UK has 750 positions at risk.
The video game industry has been particularly hard hit, with an estimated 45,000 jobs lost from 2022 to July 2025 across the global industry. 'The industry is currently in a reset phase,' according to a report by DDM Games cited in industry analysis. 'Companies are restructuring their operations through closures, layoffs, and divestitures.' Approximately 26% of European game developers have been laid off at least once during this period.
Startup Ecosystem Also Affected
The startup landscape hasn't been spared either. Amsterdam-based Bird cut 33% of its workforce, while other tech startups like Hugging Face (4% reduction) and Tabnine (18% cut) have also implemented layoffs. According to TechFundingNews, 47 tech companies laid off over 11,663 employees in early 2025 alone. Germany and the UK have emerged as new epicenters for tech workforce reductions alongside traditional hubs.
'The layoffs are driven by two main factors: rapid AI adoption and competitive pressure from Big Tech,' notes industry analyst Maria Schmidt. 'While AI automation threatens some jobs, it's also creating new opportunities in AI development and data science.'
Economic and Policy Context
The layoffs come amid a slowing European economy. As reported by Reuters in October 2025, European companies are implementing job cuts in response to deteriorating economic conditions. The COVID-19 pandemic initially fueled growth in sectors like gaming, leading to over-expansion that proved unsustainable as markets normalized.
In response to these challenges, the European Commission unveiled a comprehensive policy package on May 21, 2025, aimed at strengthening startups, scale-ups, and SMEs in the tech sector. Key measures include a new harmonized definition for Small Mid-Caps (SMCs) as enterprises with fewer than 750 employees and turnover under €150 million, and significant GDPR simplifications that raise thresholds for compliance requirements.
Community Impact and Future Outlook
The human impact of these layoffs extends beyond statistics. Tech communities in cities like Berlin, London, Amsterdam, and Paris are feeling the effects, with increased competition for remaining positions and downward pressure on salaries. Unity programmers, for instance, have seen their salaries fall by an estimated 50% due to high competition.
However, there are signs of adaptation. '74% of UK tech businesses reduced staff by 5-25% over the past year, though selective hiring in high-demand AI areas may help balance these losses,' according to industry reports. The European Commission's policy initiatives, including plans for a 'European Innovation Act' and tax harmonization for employee stock options, aim to create a more resilient tech ecosystem.
FunPlus CBO Chris Petrovic expects the gaming industry to return to growth in 2026, with that growth primarily originating in developing regions like China, Turkey and Vietnam. For Europe's broader tech sector, the current restructuring phase may lead to a more sustainable foundation for future innovation, though the immediate human and economic costs remain substantial.
