Deutsche Lufthansa AG planning massive job cuts
Lufthansa plans to terminate half of 6000 administrative jobs
After German mass-circulation paper Bild reported Germany's biggest airline planned to slash about 3,000 administrative staff, Deutsche Lufthansa AG has issued a statement that said it was still evaluating how many jobs it would cut in a cost-reduction program.
According to Bild report, Lufthansa planned to cut half of a total of 6,000 administrative jobs around the world, with 1,500 jobs to go in Frankfurt. The remaining administrative jobs are to be moved to a new business unit, with longer working hours and less pay, the paper said, citing an internal document.
"We always said that we do not explicitly rule out job cuts," a spokesman for Lufthansa said.
According to Reuters, Lufthansa has a total of about 116,000 employees around the world, more than half of which are based in Germany.
The report comes a day after Lufthansa unexpectedly announced its Chief Financial Officer Stephan Gemkow was quitting after 22 years of service at the airline and six years as CFO. [ID:nL6E8FP6ME]
Reuters reports that Lufthansa fared better in the global economic crisis than peers such as Air France-KLM and British Airways, but Chief Executive Christoph Franz, who took the job at the start of last year, has said the airline needs to radically cut costs to remain competitive.
It aims to improve results by 1.5 billion euros ($1.98 billion) by the end of 2014 to cope with high fuel prices, fierce competition from low-cost carriers and Middle East airlines and a weak European economy.
Silvia Quandt analyst Stefan Kick said the gloomy economic outlook would likely help Lufthansa push its point in negotiations with trade unions representing its workers.
The carrier said last week it could not rule out compulsory redundancies at its German passenger airline, which is to account for almost two thirds of cost cuts.
Services union Verdi said it had no information on any job cut plans as described by the newspaper on Thursday and demanded that Lufthansa present a comprehensive plan to boost earnings rather than releasing information bit by bit.
"Lufthansa should have informed the unions long ago," a spokeswoman for Verdi said.
Daily Sueddeutsche Zeitung separately reported there were signs that Lufthansa planned to drop its low-cost brand Germanwings. It has already shifted more European routes from its main Lufthansa brand to Germanwings to lower costs.
A spokesman for Lufthansa said no decision had been made to take the Germanwings brand off the market.