Lufthansa is reportedly preparing a sweeping cost-cutting initiative, aiming to eliminate several thousand administrative positions within the company.
According to multiple sources close to the matter, the airline group plans to reduce its administrative workforce by roughly one-fifth in the coming years. The announcement is expected during its upcoming Capital Markets Day.
Why Lufthansa is pushing for cuts
Lufthansa has struggled to regain full financial footing in the aftermath of the COVID-19 crisis. Its cost structure remains under pressure due to elevated fixed costs, volatile fuel prices, and lingering constraints in productivity.
The company has yet to return to its pre-pandemic capacity utilization. The airline has long targeted an operating margin of 8 %, but according to insiders, that goal remains distant.
Executives reportedly believe that cutting administrative overhead is among the most immediate levers to improve efficiency and profitability.
Reducing redundancy in management, streamlining processes, and shifting toward automation are expected components of the plan.
Scope and scale of the reductions
While the exact headcount remains under negotiation, insiders suggest that a few thousand jobs could be at stake across the Lufthansa Group.
The company currently employs around 103,000 people globally. If 20 % of administrative roles are removed, this would constitute a major structural change.
The cuts are expected to impact administrative and managerial positions across multiple divisions, not just the core airline arm.
Some positions may be eliminated through natural attrition, internal reorganization, or automation. The leadership has yet to confirm the precise distribution of cuts.
Broader implications & risks
This move shows that Lufthansa is willing to take drastic steps to reassure investors and stakeholders about its commitment to cost discipline.
But it is not without risks:
- Morale and retention impact: A reduction of this scale can hurt staff morale and potentially drive away talent, especially in back-office and specialized functions.
- Operational disruption: If cuts are not well managed, business continuity and organizational stability could suffer, particularly in times of volatility.
- Corporate reputation: Public and regulatory scrutiny may arise over mass layoffs, especially in Germany’s sensitively regulated labor market.
- Union resistance: Lufthansa has already faced tension with pilot unions over cost-cutting efforts earlier this year.
On the other hand, if implemented effectively, the cuts could free up capital to reinvest in core operations, fleet renewal, and modernization of IT systems.
What to watch going forward
- The exact number of positions and which divisions will be hardest hit
- How Lufthansa frames and phases the cuts (e.g. via natural attrition, voluntary departures, forced layoffs)
- The reaction from unions, especially in Germany, where labor protections are strong
- Market response: investors will closely monitor whether such cuts translate into improved margins
- Whether subsidiaries like Swiss or other group brands are affected, especially as Lufthansa has been consolidating group functions centrally.
Lufthansa’s proposed plan to cut 20 % of its administrative workforce marks one of the most aggressive restructuring efforts in its recent history.
While this move may help shore up financials and streamline operations, its execution will be critical. Both internal resilience and external perception will be tested as the airline enters a pivotal phase.
