Germany's DB Cargo announces restructuring plan to cut 2,300 jobs

DB Cargo, the struggling rail freight subsidiary of German rail operator Deutsche Bahn, has announced a restructuring plan that will lead to the loss of 2,300 jobs, following months of negotiations with works councils and the union.

The company said that the plan aims to align the company more closely with customer needs by establishing new business units focused on key sectors, including steel, automotive, chemicals and raw materials, and consumer goods.

Each of these units will operate as an independent company, responsible for its own staff, locomotives, and freight wagons, the company said.

DB Cargo said that the logistics market environment remains challenging. "We will react to this and expect further significant adjustments," the statement said, indicating that additional job losses, particularly in administration, could be on the horizon.

The central works council has reached an agreement on the future of DB Cargo on Wednesday after months of disputes. Cosima Ingenschay, deputy chair of the Railway and Transport Union EVG, highlighted the challenges of granting approval, noting that "mismanagement and lack of political support" contributed to the company's difficult economic position.

While redundancies are not planned, a social plan and voluntary redundancy program have been established.

DB Cargo, which employs 31,000 people according to its own figures, has faced significant losses for years, with an operating loss of over €260 million ($285 million) in the first half of this year.