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KLM restructuring: what 5,000 affected jobs and an 8% productivity target mean
KLM is reorganising while posting a higher profit, and its CEO says waiting would narrow the airline's options.
The scale of the restructuring
Some 5,000 jobs at KLM have already been or will be affected by the airline's restructuring. [1] That matters to KLM staff, and to anyone who flies the carrier from Amsterdam Schiphol.
Of those 5,000 jobs, 1,250 correspond to KLM Catering Services, whose tasks were transferred to gategroup last spring. [1] Around 1,000 positions will be eliminated through productivity improvements. [1]
This piece covers what KLM plans, why it says it must act, and what the plan means for you.
How KLM plans to limit the impact
KLM expects to limit the impact on employees through natural attrition, voluntary arrangements, and transfers to other positions. [2] It does not expect mass layoffs. [2]
The airline wants to negotiate new collective labor agreements with unions. [2] It targets a structural productivity increase of at least 8% by 2028. [2]
Why KLM says it must act now
Aviation is facing a tough time in general because of the impact of high jet fuel prices. [2] CEO Marjan Rintel said KLM's future is not guaranteed, citing global instability, high fuel prices, and growing pressure on the aviation industry. [2]
KLM also faces increasing limits placed on its Amsterdam Schiphol hub. [2] Its competitive challenges include increased competition from regional low cost carriers and Gulf carriers. [2]
Rintel said postponing decisions would further limit KLM's strategic options, based on scenarios drawn up with employees and external stakeholders. [1]
What came before, and the latest results
In recent years KLM introduced initiatives intended to improve its economics, before the current project. [2] KLM says it had already achieved structural improvements worth more than €750 million in recent years. [1]
The results are higher than a year ago. KLM posted an operating profit of €458 million between July and September, €106 million more than a year earlier. [1]
The network KLM wants to protect
KLM describes its core strengths as a global network of 160 destinations served nonstop from Schiphol and reliable operations supported by a modern fleet. [2]
The European Commission's approval of Air France-KLM's takeover of SAS would raise the group's stake from 19.9% to 60.5%. [1]
What it means for you
If you work at KLM, the 5,000 affected jobs include the 1,250 at KLM Catering Services and around 1,000 positions to be eliminated through productivity improvements. [1] KLM expects to limit the impact through natural attrition, voluntary arrangements, and transfers to other positions, and does not expect mass layoffs. [2]
Watch the talks on new collective labor agreements, since KLM wants to negotiate them with unions and targets a productivity increase of at least 8% by 2028. [2] Rintel warned that further changes to the organisation, working conditions, productivity and staffing levels may still be needed. [1]
Sources
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