Lufthansa to Lay Off 4,000 Employees Amid Digital Transformation

Germany’s airline group, Lufthansa, announced on September 29, 2025, that it will lay off 4,000 employees at the administrative level by 2030. This decision follows similar announcements from major IT firms such as TCS and Accenture. Lufthansa’s move aims to enhance digitalisation and automation within the company, raising concerns for many in the workforce.

The airline has faced ongoing cost pressures and labour disputes over recent years. In the previous year, Lufthansa issued two profit warnings that led to the abandonment of its target for an 8% operating margin. To address these challenges, the company has now developed a roadmap to achieve an operating margin of 8-10% by the end of 2030. Key to this strategy will be the reduction of non-operational staff by up to 20%, predominantly affecting positions in Germany.

Investor Confidence Rises Despite Layoffs

Interestingly, investor confidence in Lufthansa has seen an uptick despite the announcement of job cuts. The company’s shares rose by 2% in early trading on the same day as the layoff news. Lufthansa has indicated that these restructuring efforts are expected to generate approximately €2.5 billion (around ₹25,740 crores) in free cash flow annually.

While the airline prepares to reduce its workforce, it is also making significant investments in its future. Lufthansa has committed to purchasing more than 230 new aircraft by 2030, aiming to bolster its profitability and expand its network. The airline believes that consolidating subsidiaries and reallocating resources from high-cost divisions will lead to better returns.

A Turnaround Strategy for Long-Term Growth

Lufthansa has emphasized that the layoffs and expansion plans are part of a broader turnaround programme. This initiative is designed to reassure investors about the company’s commitment to achieving long-term stability and growth in a highly competitive industry.

As Lufthansa moves forward with its digital transformation, the implications for its employees and the aviation sector as a whole will be closely monitored. The airline’s ability to balance workforce reductions with strategic investments will be crucial as it navigates these turbulent times.