European Firms Hit Hiring Brakes Over AI and Slowing Growth

European hiring momentum is cooling as slower growth and accelerating AI adoption make both employers and workers more cautious. DW.com reports: [Angelika Reich, leadership adviser at the executive recruitment firm Spencer Stuart] noted how Europe's labor market has "cooled down" and how "fewer job vacancies and a tougher economic climate naturally make employees more cautious about switching jobs." Despite remaining resilient, the 21-member eurozone's labor market is projected to grow more slowly this year, at 0.6% compared with 0.7% in 2025, according to the European Central Bank (ECB). Although that drop seems tiny, each 0.1 percentage point difference amounts to about 163,000 fewer new jobs being created. Just three years ago, the eurozone created some 2.76 million new jobs while growing at a robust rate of 1.7%. Migration has also played a major role in shaping Europe's labor supply, helping to ease acute worker shortages and support job growth in many countries. However, net migration is now stabilizing or falling. In Germany, more than one in three companies plans to cut jobs this year, according to the Cologne-based IW economic think tank. The Bank of France expects French unemployment to climb to 7.8%, while in the UK, two-thirds of economists questioned by The Times newspaper think unemployment could rise to as high as 5.5% from the current 5.1%. Unemployment in Poland, the European Union's growing economic powerhouse, is edging higher, reaching 5.6% in November compared to 5% a year earlier. Romania and the Czech Republic are also seeing similar upticks in joblessness. The softening of the labor market has prompted new terms like the Great Hesitation, where companies think twice about hiring and workers are cautious about quitting stressful jobs, and Career Cushioning, quietly preparing a backup plan in case of layoffs.

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