The European Parliament has approved €1.8 million in financial support to help hundreds of workers in Austria return to employment, following layoffs at motorcycle manufacturer
KTM Gruppe.
In a decisive vote on Thursday, Members of the European Parliament backed a proposal from the European Commission to mobilise funds from the European Globalisation Adjustment Fund for Displaced Workers (EGF). The measure passed with a strong majority, reflecting broad political support for assisting workers affected by industrial restructuring.
€3 million support package for displaced workers
The funding forms part of a broader €3 million recovery package aimed at 420 employees who lost their jobs after KTM halted production in April 2025.
The programme will provide:
- Personalised career counselling
- Job search assistance
- Skills training and reskilling opportunities
- Financial training allowances
The EU will cover 60% of the costs (€1.8 million), while Austria’s public employment service will finance the remaining 40%.
Why KTM cut jobs
Once considered one of Europe’s leading motorcycle brands, KTM faced mounting challenges in 2024. A combination of declining sales and persistent supply chain disruptions led to significant financial losses. The company entered insolvency proceedings and temporarily shut down production in April 2025.
Although KTM later secured fresh funding—allowing operations to resume—the restructuring came with cost-cutting measures, including job reductions.
Austria’s job market: resilient but under pressure
Austria’s labour market remains relatively stable compared to many EU countries, with unemployment traditionally below the EU average. However, recent developments highlight emerging structural challenges:
- Industrial shifts: Manufacturing sectors, especially automotive and machinery, are under pressure from global competition and electrification trends.
- Skills mismatch: There is growing demand for digital, engineering, and green-transition skills, while traditional roles decline.
- Regional disparities: Job losses in industrial regions can be harder to absorb compared to urban centres like Vienna.
- Labour shortages: Paradoxically, Austria still faces worker shortages in sectors such as healthcare, IT, tourism, and construction.
Initiatives like the EGF-supported programme aim to bridge this gap by helping displaced workers retrain and transition into sectors where demand is rising.
How the EU fund works
The EGF, active under the 2021–2027 framework, supports workers who lose their jobs due to major economic disruptions. EU countries can apply for assistance when at least 200 redundancies occur within a specific period.
Since its creation, the fund has:
- Helped over 181,000 workers
- Supported 186 restructuring cases
- Distributed €727 million across 20 EU countries
Looking ahead
While the KTM case underscores the volatility facing traditional industries, it also highlights the EU’s growing focus on workforce adaptation. With Austria navigating both labour shortages and industrial transformation, targeted retraining and mobility support are likely to play an increasingly important role in maintaining employment stability.