DB Cargo on track for layoffs, ‘it has already started,’ say employees
DB Cargo appears to be on track to laying off or reemploying thousands of employees as part of its economic rehabilitation programme. Its mother company, DB, aims to reduce its subsidiary’s workforce by 1,800 employees either by letting them go or by repositioning them in other posts within the DB Group. A study commissioned by the company and reported by the German newspaper DVZ and employee complaints seem to confirm the intention.
DB Cargo’s story is one of continuous hurdles in the past few years. The state-owned company has been struggling financially and has generated a loss of 2,5 billion euros for its parent company over the past eight years. In 2022, the operating results of DB Cargo continued being negative, with single wagonload transport noting losses of 442 million euros, combined transport recording losses of 108 million euros, while the block train business was also negative with 157 million euros losses. Regarding 2023, the results for H1 of the year are also concerning, with the company experiencing losses of up to 196 million euros.
The situation is not set to change in 2024 despite the company’s ambitions of getting its financial performance back to black. This appears to be the reason why more drastic measures will be deployed. It should be mentioned that DB Cargo is also under EU Commission investigation concerning its finances since its losses over the years have been compensated via the DB Group using public funds. The situation is similar to that of Fret SNCF in France, and the investigation could also produce similar results.
Minus 1,800 employees
As mentioned, DB Cargo plans to either lay off or reposition around 1,800 of its workforce in Germany. According to reports, the company does not aim to force any employee layoffs but will allow them to occur as a natural development, meaning that some positions that may open because of the process might not be filled. As for the employee transfers, they will be moved to other positions within the DB Group in a similar fashion to employee transfers applied by another subsidiary, DB Cargo Italia.
While these plans unfold, employee complaints claim that the process has already been initiated. According to WSWS.org, a publication representing the global socialist movement with outreach to German workers, DB Cargo is already facing considerable staff shortages. An interview with a DB employee who wished to stay anonymous said that DB Cargo’s “downsizing is already in full swing” and that shifts in freight yards are already understaffed, worsening the working conditions of the ones left behind.
It should be noted that a few months ago, DB Cargo’s head, Sigrid Nikutta, had denied allegations concerning possible massive job cuts and had characterised them as “just speculations.”
The rumours concerning thousands of jobs being cut stemmed from DB’s plans to reduce financial losses by restructuring its freight business. One of the scenarios included the scaling down or stoppage of unprofitable business segments like single wagonload and, thus, the subsequent losses of jobs in these sectors.
Regarding single wagonload, DB Crago is currently devising plans to make it more efficient and profitable by standardising its services. This could result in less flexibility and more fixed services, which would mean fewer combined single wagonload trains running and, consequently, fewer employees involved. Additionally, it could mean that those remaining services could become more expensive for customers.