Lufthansa said the majority of the layoffs would be in Germany and take place by 2030.
The focus of the cuts will be on administration and not on “operational roles,” the company said
The group, which employs around 103,000 people in total, includes Eurowings, Austrian, Swiss and Brussels Airlines, as well as the recently acquired Italian flagship airline ITA Airways.
The news is a further blow to the German economy, which is facing a second straight year of recession while unemployment is at a ten-year high.
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The downturn has hit some of the country's corporate giants hard, squeezed by Chinese competition, high energy costs and the slow adoption of new technologies.
Lufthansa's announcement comes just days after another major German company, industrial giant Bosch, said it would cut 13,000 jobs, or three percent of its global workforce.
"The Lufthansa Group is reviewing which activities will no longer be necessary in the future, for example due to duplication of work," the company said in a statement.
"In particular, the profound changes brought about by digitalisation and the increased use of artificial intelligence will lead to greater efficiency in many areas and processes," it said.
Trade union Verdi, which represents Lufthansa office staff, vowed to fight the "drastic cuts".
It blamed in particular rising costs facing the aviation sector, from airport charges to new environmental rules.
"German and European aviation policy bears a large share of the responsibility for this development," said union representative Marvin Reschinsky, urging the German government to take action to help the sector.
Lufthansa also set new financial targets for 2028-2030, including an adjusted operating margin of eight to 10 percent.
However, management said they were optimistic about the current year. Profit is expected to significantly exceed the previous year's figure of €1.6 billion as planned.
The restructuring will involve bringing the operator's airlines closer together.
The aim of these cost-cutting measures is to position the company for the future and achieve attractive returns for shareholders in the long term.
It comes after the airline giant cut thousands of staff during the Covid pandemic and then went on a hiring spree.
Is the next pilot strike coming?
First, however, management must deal with the threat of a pilot strike.
This Tuesday marks the end of the ballot by the Vereinigung Cockpit (VC) pilots' union. It has called on its members at Lufthansa's core company and its cargo subsidiary Lufthansa Cargo to decide on industrial action. This could result in strikes that would affect passengers.
The point of contention is company pensions. Lufthansa recently rejected union demands, claiming they were unaffordable.
With reporting by Rachel Loxton
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