German blue chips post record quarterly profits but cut 41,000 jobs

Germany's 40 blue-chip DAX companies posted record second-quarter operating profits while cutting more than 40,000 jobs, according to a study by consultancy EY released on Friday.

Combined earnings before interest and taxes (EBIT) rose nearly 16% to €52.6 billion ($60.7 billion), about €7 billion more than a year earlier and 10% above the previous second-quarter record set in 2024. 

Revenue rose 4.6% to a record €463 billion despite the war in Iran and trade tensions with the United States.

Deutsche Telekom, Germany's largest telecommunications company, led quarterly operating profits with €6.9 billion, followed by insurer Allianz with €4.9 billion, carmaker Volkswagen with €3.5 billion and industrial group Siemens with €3.4 billion. 

Pharmaceutical and agrochemicals group Bayer and property company Vonovia recorded the strongest profit growth.

EY said growth was concentrated in sectors benefiting from special conditions, including defence, artificial intelligence and data centres, as well as banks and insurers. 

Chemical companies also benefited from being able to raise prices due to the war in Iran and supply shortages in Asia. 

Traditional industrial companies, particularly carmakers, continued to struggle.

Carmakers revenue fell 1.2% and operating profit dropped 12%. BMW suffered the steepest decline, with EBIT down 39%, while Volkswagen and Daimler Truck each recorded a 9% drop.

"Anyone looking only at the record figures might think the crisis is over - but the opposite is true," EY Germany chief Henrik Ahlers said, citing weak domestic demand and fragile conditions in parts of industry.

DAX companies employed about 3.49 million people at the end of June, down 1.2%, or 41,000, from a year earlier. Of the 37 companies that provided employment figures, 21 increased their headcount while 16 cut jobs. Job losses were driven mainly by the automotive sector, while defence company Rheinmetall, for example, significantly expanded its workforce. 

EY said further job cuts were likely in the struggling automotive sector.