Dutch airline KLM announces restructuring affecting around 5,000 positions

Dutch flag carrier KLM announced Thursday a sweeping restructuring affecting around 5,000 positions as it seeks to cut costs and improve annual earnings by €1 billion ($1.1 billion) amid global instability, high fuel prices and mounting pressure on the aviation industry.

The airline said the measures would affect all divisions, creating a smaller, simpler organization through outsourcing, internal restructuring and closer cooperation within the Air France-KLM group.

The number of positions within KLM is expected to decline by nearly another 15%, with approximately 5,000 roles already reorganized or scheduled for restructuring.

The changes include activities involving 1,250 positions at KLM Catering Services, which have been carried out in partnership with gategroup since spring.

Work associated with another 800 positions in Ground Services will be transferred to external providers.

Approximately 2,000 positions, including 1,500 at customer contact center Cygnific, will move to Air France-KLM, while productivity improvements are expected to reduce staffing needs by a further 1,000 positions.

KLM said it would seek to limit the impact on employees through natural attrition, voluntary arrangements and transfers to other roles.

Chief Executive Marjan Rintel said global instability, elevated fuel costs and mounting industry pressures required far-reaching changes across the company.

Management warned that further adjustments to staffing, employment conditions and organizational structures could be necessary, depending on progress.

Productivity, earnings targets

KLM aims to permanently increase productivity by at least 8% by 2028 while keeping wage growth very moderate.

The airline plans to negotiate new collective labor agreements with unions to support those objectives.

The targeted €1 billion improvement would raise annual earnings to €1.4 billion, helping finance investments in aircraft, customer service and employees.

KLM said it had already achieved more than €750 million in structural financial improvements in recent years through measures including reducing office positions, leaving vacancies unfilled and consolidating office space.

However, the company said those efforts had proved insufficient to secure its long-term financial position.

The airline plans to maintain its network of 160 destinations served nonstop from Amsterdam's Schiphol Airport, supported by a simplified and modernized fleet.

Capacity will be directed toward routes that contribute most to passenger connections and the nonstop network as KLM seeks to restore profitability across its European operations.