The first half of 2026 has seen multinationals announce more than 430,000 job cuts, with the automotive and technology sectors accounting for the largest shares. German carmakers are at the centre of the most acute labour confrontations: Volkswagen is preparing to present a plan to its supervisory board on 9 July that would eliminate up to 100,000 positions and close four domestic plants, while Mercedes-Benz faces strikes by over 33,000 workers after management proposed extending the working week from 35 to 40 hours without additional pay and withholding an annual bonus. The IG Metall union has described the measures as an attack on contractually guaranteed rights and signalled that protests will spread to other manufacturers and suppliers.

Viewed from Wolfsburg and Stuttgart, the crisis reflects a collision of falling European demand, aggressive competition from Chinese brands, and US tariffs. Volkswagen’s net profit halved in 2025, and Mercedes reported a 17 per cent drop in first-quarter operating profit, citing import duties, raw material costs, and a 27 per cent sales slump in China. The state of Lower Saxony, which holds 20 per cent of Volkswagen’s voting shares under the so-called Volkswagen Law, complicates any plant closures without its consent. In Hong Kong, the ManpowerGroup employment outlook for the third quarter plunged to minus 9 per cent, a 20-point drop from the previous quarter, as AI automates entry-level tasks and some employers bypass local graduates in favour of imported workers for technical roles.

In the technology industry, layoffs have reached nearly 154,000 in the first half, according to data compiled by TradingPlatforms, putting the sector on track to exceed the 246,000 recorded in all of 2025. Oracle, Amazon, Cognizant, Meta and Microsoft have all announced significant reductions, often explicitly linked to AI-driven restructuring. An analysis of 2.85 million job descriptions by the platform Draup found that AI is not shrinking overall demand for tech workers but is shifting the skills employers value: systems design, debugging, data governance and model evaluation remain essential, while routine coding and manual testing are increasingly automated. The same analysis noted that expectations for early-career hires are rising fastest because the routine tasks that once served as training ground are the most susceptible to automation.

The expansion of AI infrastructure is also widening the gap between technology companies’ climate pledges and their emissions. Google’s ambition-based emissions rose 18 per cent in 2025, reaching 14.5 million tonnes of CO2 equivalent, driven largely by hardware manufacturing and data-centre construction. Amazon’s emissions climbed 16 per cent in the same period. Both groups now emit more per dollar of revenue than before. Google signed contracts for a record 12 gigawatts of new clean energy capacity, yet its electricity consumption grew 37 per cent, the largest annual increase ever recorded by the company. UN Secretary-General António Guterres has called on AI leaders to disclose the full environmental footprint of data centres, which consumed 448 terawatt-hours of electricity in 2025—equivalent to the eleventh-largest national consumption.

In financial markets, analysts have raised S&P 500 earnings growth projections for the coming year to 25 per cent, the fastest pace since the post-pandemic rebound, fuelled by AI-related demand. Some asset managers, including GMO and Pictet, warn that the speed of upward revisions resembles a recovery from a crisis and may prove unsustainable, particularly if AI-linked capital spending fails to convert into profits. The next factual milestones are the Volkswagen supervisory board meeting on 9 July and the start of the second-quarter earnings season, which will test whether corporate results can support the elevated expectations.