The Scale of the Crisis
Since early 2025, the number of insolvencies in the services sector has risen sharply. Marketing and communications agencies, IT service firms, and consultancies are particularly affected. According to industry associations, insolvencies are now well above pre-pandemic levels.
“We are seeing the strongest wave of bankruptcies in more than a decade – but not all segments are equally affected.”
Root Causes: A Combination of Pressures
- Margin pressure: Intense price competition and cost pressure from global rivals.
- Client caution: Many businesses are postponing projects or cutting budgets.
- Digitalization & AI: Automation reduces demand for traditional services.
- Interest rates: Higher financing costs hit smaller providers especially hard.
Industries Under the Most Pressure
Providers heavily dependent on marketing and communications budgets are hit hardest. Creative and advertising agencies face shrinking budgets. IT and software service providers are split: while commoditized offerings are under stress, specialists in AI, cybersecurity, and automation continue to grow.
Market Consequences
The insolvency wave has far-reaching consequences:
- Market consolidation: Larger players absorb smaller insolvent firms.
- Talent mobility: Laid-off employees quickly move to expanding tech companies.
- Client disruption: Customers suddenly left without providers must scramble to find alternatives.
Paths Out of the Crisis
Despite the challenges, opportunities exist for those willing to adapt:
- Focusing on specialization and niche markets.
- Investing in automation and AI-driven services.
- Building stronger, longer-term client partnerships.
- Streamlining cost structures and diversifying business models.
Bottom line: Not all service providers will survive this crisis – but those who adapt early may emerge stronger.