Unemployment benefit payments rose to €455m in 2025 as Adem warned that slower hiring and widening labour-market mismatches were reshaping employment patterns despite continued job creation.
“The labour market is still growing, but much more slowly,” Adem director Isabelle Schlesser said on Wednesday during the agency’s annual press conference.
The unemployment rate stood at 6.2% at the end of December 2025 before climbing further to 6.3% by the end of March 2026, according to figures presented during the briefing. More than 21,000 resident jobseekers were registered while vacancies remained well below post-pandemic highs.
“The 2025 figures were still a bit more positive than those for 2026,” labour minister Marc Spautz said, warning that weaker economic conditions and international pressures were likely to weigh further on the labour market.
The employment agency paid €455 million in unemployment benefits during 2025, around €30 million more than a year earlier and roughly €130 million more than in 2023, even before any future shift in European rules on cross-border workers. More than 26,000 people received unemployment compensation during the year.
Mismatch economy
Employment in Luxembourg nevertheless continued to grow overall, rising above 530,000 positions by March 2026. Growth, however, has slowed sharply compared with the post-pandemic rebound. Statec forecasts presented during the conference projected employment growth of 1.6% in 2026 and 1.8% in 2027.
At the same time, Adem registered more than 42,400 files in 2025, up 26% compared with 2022. Registrations among non-residents rose more than 70% over the same period.
The slowdown is becoming increasingly uneven between sectors. Construction employment contracted 5% between late 2023 and late 2025 while manufacturing fell 2% and ICT employment slipped slightly. Healthcare and social services, by contrast, continued to expand strongly.
Schlesser said Luxembourg was still creating jobs overall, but no longer at the pace that had underpinned the country’s labour-market model in earlier years. She also warned that the sectors still recruiting did not always correspond to the profiles of people registering with Adem.
Around 143,000 new employment contracts were signed during 2025, Schlesser noted, still exceeding the number of contracts terminated during the year.
Cross-border dependence
Officials repeatedly described Luxembourg’s labour market as unusually dependent on foreign labour. Cross-border workers now account for roughly 47% of salaried employment while foreign residents represent another 26%, leaving Luxembourgish residents as barely more than a quarter of the workforce.
French cross-border workers alone account for 26% of total employment and recorded employment growth of more than 20% between late 2019 and late 2025. Resident workers from outside the EU posted the strongest growth over the same period, increasing by more than 60%, albeit from a smaller base.
“One worker registered with us out of four is now non-European,” Schlesser said, describing the shift as a growing operational challenge for the agency, particularly in language support and training.
Recruitments and contract terminations are now both running at historically elevated levels, according to figures discussed during the conference, pointing to a labour market that remains active but markedly less stable than during the years of stronger growth.
European reform pressure
The issue has already triggered political concern in Luxembourg after a provisional EU-level agreement last month raised the prospect of the country becoming directly responsible for unemployment payments to large numbers of cross-border workers.
ADEM warned the reform could have major consequences for Luxembourg because of the country’s unusually large cross-border workforce.
“When you know that 47% of our labour market consists of cross-border workers, then the calculation is very simple,” Schlesser said. “We would end up with roughly double the number of clients we currently have.”
Spautz said Luxembourg would need to adapt to changing European rules and labour-market pressures that were increasingly structural rather than temporary.
Rising workload
Schlesser said rising unemployment was placing growing pressure on the agency’s staff and systems.
Between 2022 and 2025, the total number of files handled by Adem rose from roughly 33,700 to more than 42,400. Internal figures presented during the conference showed some advisers now managing more than 250 active clients each.
“I think there is no other way than digitalisation,” Schlesser said, while acknowledging that the rollout of new systems had initially caused technical problems and payment delays for some claimants.
Around 85% of unemployment-benefit applications are now submitted online through MyGuichet. The agency has already processed more than 20,000 digital payments worth more than €50m through the new system.
Schlesser said most payment backlogs had now been resolved, although some cases remained delayed because documentation was still missing from applicants.
Digital response
Adem also continued expanding retraining and recruitment initiatives during the year.
Nearly 10,000 jobseekers received training in 2025, representing more than 15,000 course participations. Adult apprenticeships reached record levels while recruitment events and employer partnerships also expanded.
The agency sent more than 123,000 candidate referrals to employers and organised 106 recruitment events during the year. More than 25,000 candidates activated accounts on Adem’s online job platform.
Looking ahead to 2026, management said priorities would include preparing for the possible cross-border reform, simplifying youth-employment schemes and further digitising registration and recruitment procedures.
“The profiles of jobseekers are becoming completely different,” Schlesser said. “We need to adapt much more closely to the needs of each client.”
