Deutsche Bahn Cuts 30,000 Jobs Amid Financial Struggles

Deutsche Bahn, Germany's rail operator, announced plans to reduce its workforce by 30,000 jobs over the next five years due to substantial financial losses. The company cites extensive investments in repairs, strikes, and bad weather as contributing factors. A new state support program aims to mitigate the financial impact.

German rail operator Deutsche Bahn announced plans to cut 30,000 jobs, approximately 9% of its workforce, following massive investments in rail network repairs, strikes, and adverse weather conditions, leading to a billion-euro first-half net loss.

The job cuts will occur over the next five years, focusing mainly on administrative positions, said Chief Financial Officer Levin Holle. For this year alone, about 1,500 jobs will be eliminated. The company has also lowered its full-year operating profit and revenue forecasts, now expecting about 1 billion euros in adjusted earnings before interest and taxes for 2024, downgraded from over 1 billion euros projected in March. Revenue is anticipated to be around 45 billion euros, down by 2 billion euros from previous forecasts. The rail operator reported a net loss of 1.2 billion euros for the first half of the year.

Deutsche Bahn is undertaking massive repair works on tracks, crossings, and overhead lines following more than a decade of underinvestment, resulting in substantial train delays and cancellations. The recently introduced Germany ticket, allowing travel on all regional and local trains for 49 euros per month, spurred a significant rise in passengers, further complicating the situation. Bad weather and worker strikes exacerbated the challenges, costing the company around 300 million euros. With 33 billion euros in debt, Deutsche Bahn is banking on a new state support program for advance payments on route renovations, which is expected to impact cash flow and profits in the latter half of 2024.

(With inputs from agencies.)