The Iran war, the massive increase in kerosene prices and the current strikes have increased cost pressure on Lufthansa. The group has therefore decided on comprehensive cost-cutting measures. Not only does he want to reduce what he offers to passengers and take some aircraft out of service – especially those that are close to the end of their technical operational capability and have comparatively high operating costs.
Furthermore, the operations of the subsidiary Cityline are to be discontinued with immediate effect and the employees are to be laid off, as the Handelsblatt has learned. But that’s not all: the group has also announced savings targets for filling positions, internal events and external consulting services. In doing so, he wants to reduce administrative costs. Lufthansa announced this in a press release. The measures accompany the existing target of cutting 4,000 administrative jobs across the group by 2030.
Lufthansa sends open letter to employees
When asked by the human resources department, the group did not provide any information about the scope of further measures that the Lufthansa board of directors is said to have expressed to the workforce in an open letter, as Handelsblatt reported. However, he confirmed that due to the current situation, cost discipline must be exercised, i.e. non-essential expenses should be avoided. The Handelsblatt, for example, mentioned that the group wanted to make cuts in the budgets for business trips and further training, among other things.
Lufthansa restructuring: explain cost-cutting measures well
Companies must always carefully consider whether it makes sense to save on further training costs, because further training is a necessary long-term investment. This is emphasized by Andreas Schmitz, managing director of the service provider B&H Digital. His company offers IT tools that support companies, among other things, in managing personnel restructuring projects.
However, Schmitz also points out: “Further training is only effective if it is planned sensibly and contributes to the goals and future of the person and the company. If this is not the case, a temporary break can definitely make sense.” However, he advises not to pause the measures across the board, but rather to leave responsibility to the direct or higher-level managers with budget responsibility and, if necessary, to reduce the budget. Basically, according to Schmitz, it is right to “examine all options and not immediately pull out the mallet and cut jobs.”
Restructuring: HR has to explain a lot
The IT expert advises companies that need to make savings to take two perspectives into account so that the measures are efficient: “Firstly, visible measures are often needed that also serve as a signal of the necessary change. These should underline the need to act and have a direct effect. Secondly, there is often a lot of untapped potential for savings.” In order to increase this, companies should involve the workforce, because they know possible savings potential, especially in their direct work environment. He therefore recommends actively encouraging the workforce and allowing them to “address the many small improvements and savings potential directly at the workplace”.
When restructuring, it is also important to explain a lot: “If everyone understands and can understand the reasons, even a time of austerity measures can have a positive effect on the culture, especially if sensible measures are taken to avoid really drastic interventions,” says Schmitz.
In addition, from his point of view, it makes sense to establish “holistic and higher-level coordination” and to empower managers. “The most sustainable optimizations always come from the direct responsibility of managers with their employees. This requires conscious empowerment and transfer of responsibility,” states Schmitz.
Our expert has 5 tips for efficient savings measures
- Implement visible measures – as Signal of necessary changes.
- Actively encourage staff to work in their areas Identify savings potential and make small improvements.
- Explain a lot so that everyone can Understand reasons for restructuring and can understand; This can have a positive effect on company culture, especially if job cuts can be prevented.
- Coordinate restructuring measures at a higher level.
- Transferring responsibility to managers, as the most sustainable optimizations from the direct responsibility of managers come with their employees
There are also currently strong eruptions at another German company. There was a significant data breach at a VW subsidiary that affected sick leave of 600 employees. The authorities have been informed.
Kirstin Grundel deals with the topics of compensation & benefits, remuneration and company pension schemes. She also works as an editor for the magazine “Comp & Ben”. She is the editorial contact for the Total Rewards practice forum.
