After several years of strong growth, Luxembourg’s job market is beginning to show signs of slowing. While Luxembourg remains attractive for many reasons, figures from late 2024 and early 2025 reveal a more subdued pace in employment growth across certain sectors.
Slower employment growth
At the end of 2024, Luxembourg had 487,109 employees, an increase of just 1% compared to the previous year, according to STATEC (the national statistics institute). While still a positive figure, this growth rate is modest and mirrors levels seen in 2009 during the global financial crisis.
Part of this sluggish growth can be attributed to diverging trends among cross-border workers. While number of employees commuting from France continues to rise at the same pace as that of Luxembourg residents, there has been a slight decline in cross-border workers from Germany and Belgium, with drops of 0.3% and 0.2% respectively compared to the last quarter of 2023.
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On the other hand, the number of non-EU workers has seen a sharp increase: +7% year-on-year, totalling 28,269 employees.
Sectors facing difficulties
Behind the overall weak growth lie significant sectoral disparities. Several of the country’s economic pillars have experienced notable downturns:
Construction, which accounts for nearly 10% of national employment, has been hit particularly hard. In 2024, the sector lost around 2,475 jobs, a 4.3% drop over the year. The decline has been most evident in residential and non-residential building activities.
The financial and insurance sector, usually a key driver of Luxembourg’s economy, has seen a marked slowdown. From 2011 to 2021, the sector grew by an average of 2.5% annually. However, in 2024 it grew by only 1.3%, continuing the downward trend already visible in 2023.
The IT sector, once a strong performer with 3.9% growth in 2023, is now flatlining, recording a slight decline of 0.1% in 2024. Still, it remains an important part of the workforce, representing about 4.5% of all jobs in the country.
Conversely, public administration, social services, and education have shown more robust growth. These sectors accounted for 77.4% of all new jobs created in 2024.
An overqualified workforce
Beyond the headline figures, another trend is emerging: a growing mismatch between jobseekers' qualifications and the needs of the market. The number of jobseekers holding higher education degrees is rising fast, yet even highly educated candidates are struggling to find roles that match their skill sets. Moreover, a study conducted by Moovijob.com revealed that 40% of Luxembourg recruiters believe that experience outweighs qualifications.
Another contributing factor is the relatively low employment rate among older workers. Many of them face challenges entering or re-entering the workforce, as their skills no longer align with today’s job market demands, particularly in areas such as digital literacy and flexibility.
The coming months will be crucial in determining whether this slowdown becomes a long-term trend or whether the more resilient sectors can drive a recovery. In the meantime, upskilling, lifelong learning, and targeted support for jobseekers will be key to preventing a deeper decline.
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