Qimonda, the ailing memory chipmaker, on Monday became the latest German company to announce massive job cuts, fuelling concerns that the labour market in Europe’s biggest economy is on the verge of contracting.

The Munich-based company wants to slash about 3,000 of its 13,500 jobs worldwide in a bid to counter a severe downturn in the chip market. Thomas Seifert, Qimonda’s chief operating officer, said about half of the job cuts would be in Germany.