Lufthansa Announces Major Workforce Reduction
German aviation giant Lufthansa Group has revealed plans to eliminate 4,000 administrative positions by 2030 as part of a comprehensive restructuring strategy focused on digitalization and automation. The job cuts, announced in September 2025, represent the largest workforce reduction at Europe's largest airline group since the pandemic and will primarily affect back-office roles in Germany.
Digital Transformation Drives Job Cuts
The restructuring initiative, internally called "Matrix Next Level," aims to address investor concerns about cost control and lagging profitability. Lufthansa plans to achieve these workforce reductions through digitalization, automation, and process consolidation, with artificial intelligence playing a central role in transforming administrative functions.
"We need to digitalize, automate, and bundle our administrative work to remain competitive in an increasingly challenging aviation market," said a Lufthansa spokesperson. The company emphasized that operational staff including pilots, cabin crew, mechanics, and ground personnel will not be affected by these cuts.
Financial Pressures Mount
The announcement comes as Lufthansa faces significant financial challenges. The company reported an 18% drop in 2024 net profit to 1.38 billion euros despite revenue rising slightly to 37.6 billion euros. The profit decline was attributed to multiple factors including strikes, higher costs in Germany, and delays in aircraft deliveries.
Lufthansa CEO Carsten Spohr has been under pressure to improve profitability after the company missed its 2021 medium-term margin targets and had to lower guidance twice in 2024. The airline has set new financial targets including achieving over €2.5 billion in free cash flow from 2028-2030 and an adjusted return on capital employed of 15-20%.
AI Integration Accelerates
Lufthansa's digital transformation strategy includes significant investments in artificial intelligence. The company has partnered with Google Cloud to develop its Operations Decision Support Suite (OPSD), which integrates data from multiple domains to provide real-time recommendations for flight operations. The system has achieved an impressive 90% acceptance rate from operations controllers.
Additionally, Lufthansa recently announced a strategic collaboration with Infosys to establish a Global Capability Center in Bengaluru, India, focused on developing AI-powered aviation solutions. "This partnership will help us optimize digital operations and improve passenger services through advanced AI applications," explained a Lufthansa technology executive.
Union Response and Labor Relations
The planned job cuts have already drawn criticism from labor unions. The Verdi union has stated it will not accept "drastic cuts" and plans to use upcoming collective bargaining to combat such measures. This comes amid ongoing labor disputes over pensions and working conditions that have already resulted in multiple strikes throughout 2024 and 2025.
"We understand the need for efficiency, but we cannot accept job losses on this scale without proper consultation and consideration for our members," said a Verdi union representative. The union has vowed to protect workers' interests during the restructuring process.
Industry Context and Future Outlook
Lufthansa's restructuring reflects broader trends in the aviation industry, where airlines are increasingly turning to technology to improve efficiency and reduce costs. The company, which operates multiple airlines including Swiss, Austrian, and Brussels Airlines, carried 131 million passengers in 2024 but has been losing ground to European rivals IAG and Air France-KLM in terms of profitability.
Despite the job cuts, Lufthansa continues its fleet modernization with plans to introduce over 230 new aircraft by 2030, including 100 long-haul airframes. The company also recently finalized an agreement to acquire a minority stake in Italy's ITA Airways with plans to gradually increase its holding to 100% over 18 months.
The restructuring announcement was well-received by investors, with Lufthansa's shares rising 3.4% in early trading following the news. However, the company still faces challenges including potential pilot strikes, aircraft delivery delays, and certification issues with its new Allegris premium cabin on Boeing 787-9 aircraft.