
13/08/2025
Austria is facing a paradox in its labour market: unemployment is climbing, yet many companies report they cannot find enough staff.
According to a March 2025 Austrian Business Check survey by the Credit Protection Association of 1870 (KSV1870), 54% of domestic firms say they are experiencing staff shortages, with 23% describing the problem as severe. The main reason cited is a lack of funds.
In most cases, high costs of retaining staff and falling revenues are blamed. As a result, existing employees are often required to take on extra work – particularly in the hospitality and tourism sectors.
The survey of 1,100 companies found that around 70% are choosing not to replace departing staff to cut costs. Ricardo-José Vybiral, CEO of KSV1870 Holding, said personnel expenses were often “the biggest lever” for reducing outgoings. However, he warned that this strategy could undermine competitiveness in the long term.
Despite the labour shortages, only 18% of companies plan to increase their workforce this year.
Austria is currently seeing an average of 84 corporate bankruptcies each week. At the same time, unemployment rose by 5.2% in July compared with the same month last year, with 359,374 people registered as unemployed or in training schemes.
Long-term unemployment was up 9.8%, while youth unemployment increased by 3.7%. Joblessness among foreign nationals rose by 5.3%, and among Austrian citizens by 5.5%.
The figures have sparked a heated political debate, with some commentators warning of a looming “labour market disaster.”