Lufthansa launches a major restructuring: 26,000 redundancies

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Serviceairplane transport

After the state bailout with 9 billion, the company prepares heavier than expected cuts, equal to 19% of the total workforce

by Gianni Dragoni

(AFP)

After the state bailout with 9 billion, the company prepares heavier than expected cuts, equal to 19% of the total workforce

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After the state bailout with 9 billion euros in aid, there is a severe restructuring for Lufthansa. The company could cut up to 26,000 jobs worldwide, 19% of the total, to cope with the crisis caused by the coronavirus. The news emerged after a meeting in recent days between the company and the unions, according to reports from the UFO union.

Cuts above 10,000 already provided
The company has not made any statements regarding this news published by the German media. The cuts would be far more than expected before the state aid package was approved. There had been talk of 10,000 redundancies, now of 26,000. Some of the places in danger are part-time. The total equivalent of the cuts would be 22,000 full-time jobs, the so-called “full time equivalent” or “Fte”, in the staff management jargon.

How employees are divided
According to the financial statements at the end of 2019 the group had 138,353 employees. So the cuts would affect 19% of the overall workforce. The employees of the group are approximately 61,550 in air transport (network airlines and Eurowings), 26,650 in maintenance (Lufthansa Technik), 4,539 in logistics, 35,679 in catering (Lsg).

Verdi and Linke want to discuss the bailout again
The news of the cuts had an immediate political effect, as the group agreed on a 9 billion euro rescue package with the German government, and a 20% state stake in the capital. The opposition, Verdi and Linke, asked Angela Merkel’s government to retract the terms of the agreement with the company. Lufthansa, like all air transport, has been paralyzed by the pandemic, with serious effects on the accounts.

First quarter in red
After the reduction in net profits in 2019 from 2.16 to 1.2 billion euros (out of 36.4 billion in revenues), in the first quarter of this year the group announced losses of 2.1 billion. Turnover decreased by 18% to 6.4 billion. Expectations are worse for the second quarter. Extraordinary measures have been announced: sale of “non-strategic” activities such as the catering division, listing of maintenance activities (Lufthansa Technik) to raise cash, job cuts, capacity reduction.



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