Lufthansa to Axe Thousands of Jobs Across Europe in Massive Cost-Cutting Drive
- Lufthansa is finalizing plans to slash thousands of jobs across Europe as part of a massive cost cutting program. Sources claim the embattled airline group will axe up to 20% of admin jobs at airline brands like Austrian and SWISS over the next two years as it moves to centralize key functions in Germany.
The German flag carrier Lufthansa plans to cut thousands of jobs in a bid to slash costs that could hit airline workers in Austria, Belgium, Germany, Italy, and Switzerland.
According to sources cited by Reuters, the Lufthansa Group is looking to axe up to 20% of its administrative staff within the next two years, although details aren’t expected to be publicly revealed until Monday.
Along with the namesake Lufthansa, the group also includes Austrian Airlines, Brussels Airlines, ITA Airways, and SWISS International Air Lines, as well as the low-cost carrier Eurowings and leisure subsidiary Discover.
In recent years, Lufthansa Group boss Carsten Spohr has attempted to cut costs and improve efficiency by setting up various subsidiary companies, such as Lufthansa City Airlines, which employs pilots, cabin crew, and support workers on cheaper contracts.
Despite these efforts, however, the Lufthansa Group is still lagging behind rivals like the Air France-KLM Group and IAG, the Madrid-based group that owns British Airways and Spanish flag carrier Iberia.
The move to slash admin workers is likely connected to a plan confirmed earlier this month to take more control of its various airline brands from a central location in Germany.
While the Lufthansa Group will let the likes of Austrian and SWISS decide their own onboard product, the group will centralize functions such as network planning, commercial management, sales, and loyalty programs.
Other key areas, such as airport hubs, technology, personnel, and finances, will also be governed centrally.
Lufthansa is at pains to point out that it has no intention of stripping away the unique identities that make these different airlines what they are, but, clearly, centralizing so many functions will result in job losses across the group.
What is, perhaps, so galling for many of these workers, however, is that their jobs are now on the line because the core Lufthansa brand has proven to be the group’s ‘problem child’ – not my words, but those of Carsten Spohr.
Despite Spohr’s attempts to cut costs by siphoning off flights to cheaper subsidiaries, the core Lufthansa brand remains inefficient and bloated.
Spiralling employee costs are a major issue for the airline, and attempts to modernize contracts with more flexible work rules have been met with fierce opposition.
Lufthansa is currently facing the threat of a pilot’s strike in an ongoing dispute over pensions. Last April, the airline also faced massive disruption after flight attendants and ground workers united in coordinated strike action that cost the airline at least €350 million (US $372 million).
Spohr recently told workers that cuts had to be made in its workforce to fund ongoing investment in the airline.
