KLM to cut almost 15% of positions, outsourcing ground handling
- KLM will cut almost 15% more of its positions.
- About 800 KLM ground services positions will move to external providers.
- 1,500 positions at KLM contact center Cygnific will move to Air France-KLM.
- KLM targets an extra €1 billion (US$1.1 billion) in annual earnings improvement.
AMSTELVEEN, NETHERLANDS — KLM will cut almost 15% more of its positions as it hands parts of its ground handling to outside firms, moves its contact center into the wider Air France-KLM group and outsources other work. The Dutch airline is seeking another €1 billion (US$1.1 billion) a year in earnings improvement.
About 5,000 positions have been or will be reorganized, with the work done differently. The cuts come on top of reductions KLM has already made in recent years.
Where the positions go
Since this spring, the work of 1,250 positions at KLM Catering Services has been carried out with gategroup. An estimated 800 positions in ground services involve work that will move to external providers, KLM said in a statement on Nov. 5.
Another 2,000 positions, including 1,500 at customer contact center Cygnific, will transfer to Air France-KLM. Productivity improvements will remove about 1,000 more.
KLM expects to limit the impact through natural attrition, voluntary arrangements and transfers to other roles.
Specialists take over the apron
Apron services for European flights and baggage services will work with external partners. They will take over below-the-wing work at KLM Cityhopper and baggage handling in Schiphol’s East Hall.
KLM said ground handling specialists can invest more and faster while delivering services more efficiently and at lower cost. It plans to hand activities that other parties can do “better, faster, or more efficiently” to partners, or consolidate them within the group.
A tougher deal for staff
KLM wants new collective labor agreements with simpler, more competitive terms. It is aiming for a structural productivity increase of at least 8% by 2028, combined with very moderate wage growth.
“It’s painful to transfer activities that have traditionally been part of our company,” said Marjan Rintel, president and chief executive of KLM. “But doing nothing would ultimately have even more painful consequences, both for jobs and for our country’s connections to the rest of the world.”
KLM has already made more than €750 million (US$830 million) of structural improvements. The new target would bring the total to €1.4 billion (US$1.55 billion).
What it means for buyers
KLM is splitting its operations three ways: specialist vendors for ground handling and catering, the parent group for contact center work, and fewer staff in-house. Airlines and other large employers weighing customer service outsourcing face the same choice between outside vendors and group shared services.
Companies planning a redundancy program alongside outsourcing can compare partners in OA’s list of the top BPO companies in Europe.
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