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The rail freight subsidiary of Germany’s Deutsche Bahn said Thursday it will cut about 2,300 jobs as part of a major overhaul after years of poor performance.
The DB Cargo positions will be lost in Germany, and amount to about 13 percent of the company’s 18,000 jobs in its home market.
The company stressed there will not be any compulsory redundancies but rather jobs will be cut via voluntary redundancies, early retirement or redeployment within DB Cargo.
The news comes as its parent company, state-owned Deutsche Bahn, faces serious problems, and is seeking to focus on overhauling the country’s creaking train network.
DB Cargo chief executive Sigrid Nikutta said the job cuts were a “difficult, but necessary step.
“It’s the only way we can give our (company) a future and make our transformation a success,” she wrote in a message posted on networking site LinkedIn.
The move is part of a broader overhaul of the company, a leading rail freight operator in Europe, that is due to begin next year.
This will see it split into new business units focusing on different areas, such as steel, automotive, chemicals and consumer goods.
Each unit will operate like an independent company, which should allow them to be more flexible and thus improve quality, DB Cargo said.
Nikutta said the restructuring had been agreed with management and labour leaders after “tough negotiations”.
DB Cargo has been racking up losses in recent years and its problems have worsened due to persistent weakness in Europe’s top economy, which hit demand for rail freight transport.
Germany’s government forecast this week that the economy will contract in 2024 for a second straight year, hit by a slowdown in the crucial manufacturing sector and weak demand for its exports.
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