Deutsche Bahn, the German railway operator, is set to reduce its workforce by 30,000 positions over the next five years. This includes an immediate cut of 1,500 jobs this year.
The decision comes in response to severe financial losses, with the company reporting a €1.2 billion net loss for the first half of the year.
This marks a dramatic increase from the €71 million loss recorded in the same period last year. The job cuts will primarily affect administrative roles, impacting about 9% of the company’s total workforce.
Financial Challenges and Revised Profit Targets
The company’s operating losses from its core business also amounted to €1.2 billion, compared to €339 million during the first half of 2023.
Deutsche Bahn has adjusted its annual operating profit target to around €1 billion, down from its previous forecast of over €1 billion.
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The firm has also slightly reduced its revenue forecast to match last year’s €45 billion. The financial strain has been attributed to a combination of extreme weather, strikes, and necessary investments to address the aging rail network.
Government Support and Investment in Rail Network
Despite these challenges, Deutsche Bahn anticipates receiving substantial financial support from the German government under a new program aimed at rail network renovations.
The company has already received €4 billion in government funding for rail improvements and services in the first half of 2024, representing a 35% increase from the previous year.
The German government plans to invest €30 billion in rail renovations by 2037, down from an earlier target of €45 billion due to debt concerns.
CEO Richard Lutz has highlighted the urgent need for these investments to address the network’s aging infrastructure.
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