Lufthansa Technik to eliminate 650 positions in Germany

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Lufthansa Technik will likely eliminate 650 administrative positions in Germany as part of a company-wide restructuring project, the Hamburg-based maintenance, repair and overhaul (MRO) firm says.

The maintenance company will reduce the positions through 2015 and plans to offer options such as early retirement and severance packages to employees affected by the layoffs.

Lufthansa Technik decided to eliminate the positions after assessing results of a project it started in early 2012 to improve its administrative processes.

"Business administration functions will be centralised, purchasing activities will be bundled in competence centres, shared services will be implemented more strongly in the personnel area, and stronger regionalisation in sales will aim for better proximity to the customer," says the company in a release.

Lufthansa Technik says that in the past it was able to reduce engine overhaul costs by 20% by using a similar project in the production sector of its business.

"We have already implemented many innovations in production and optimised processes there, and now we intend similar improvements in administration," says August Wilhelm Henningsen, chairman of Lufthansa Technik's executive board. "Modern, efficient administration is an important condition for the future international growth of Lufthansa Technik AG."

Lufthansa Technik employs more than 13,000 people in Germany at facilities in Hamburg, Munich, Berlin and Frankfurt.