Lufthansa to restructure, cut 20% leadership and 1,000 admin jobs

The German airline has been considering cost-cutting measures for some time now, to reduce government loans

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Lufthansa has announced its plan to restructure the organisation to be able to deal with the economic pressures of the pandemic. The German airline has decided to reduce its leadership positions by 20 per cent and let go 1,000 employees in administrative positions.

The Lufthansa Group, which has a 138,000 strong workforce, has also decided to reduce its investment on new aircraft by 50 per cent. However, it intends to add about 80 new planes to its fleet in the next three years.

In June, the Government had provided financial aid to the airline with shareholders supporting the €9 billion bailout deal that prevented the Group from collapsing, following the sharp dip in business.

With a view to keeping increasing interest charges at bay, Lufthansa is trying to reduce government loans and equity stakes. If the interest rates go up, it will only put increasing financial pressure on the Company, which will require drastic cost-cutting measures.

While there are about 22,000 full-time employees whose services are no longer required by the airline, efforts are on to prevent forced layoffs. The Group is still discussing layoff plans with the trade unions.

The Group has already cut down its fleet of 760 by 100 aircraft and has decided to stop operating Germanwings, its budget airline.

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