You knew this was coming. Lufthansa will cut a fifth of its management positions, plus about 1,000 other jobs.
Lufthansa announced another package of restructuring measures on Tuesday, including a 20 percent cut in leadership positions and the reduction of 1,000 administrative jobs, as it battles with the fallout from the coronavirus pandemic.
Lufthansa said it would also cut the investment volume for new aircraft in half, with its financial plan allowing for up to 80 new aircraft for the group’s fleet up to 2023.
Lufthansa’s shareholders backed a 9 billion euro ($10.15 billion) government bailout last month, securing the future of Germany’s flagship airline after it was brought to the brink of collapse by the travel slump due to the pandemic.
Lufthansa already decided in early April to reduce its fleet by 100 aircraft and not to resume the operations of budget unit Germanwings.
It said on Tuesday it wants to reduce government loans and equity stakes as quickly as possible to avoid an increase in interest charges, noting that would put an additional burden on the company that added to the need for cost cuts.
Lufthansa, which employs around 138,000 people, reiterated that it has a personnel surplus of 22,000 full-time positions, but said it would try to avoid forced lay-offs if possible.
To that end, it is trying to reach agreement with trade unions, but has only been successful so far with the UFO union representing German cabin crew that is set to reap more than 500 million euros in savings.
More context: Lufthansa Shareholders Vote Yes to $10 Billion Bailout
(Reporting by Emma Thomasson; Editing by Maria Sheahan and Michelle Martin)
Copyright (2020) Thomson Reuters. Click for restrictions
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Photo credit: Lufthansa aircraft parking on north-west runway at Frankfurt Airport due to corona crisis on March 23, 2020. Oliver Roesler / Lufthansa