The departure of former DB Cargo CEO Sigrid Nikutta, who was accused of conducting a policy of “shrinking and fragmentation”, has been welcome news to some of her critics. For them, the arrival of her replacement Bernhard Osburg could have provided hope for a different course of action. Yet, they are now in for a rude awakening: nearly half of the entire workforce will be let go.
And so the policy of shrinking continues at the German national freight operator. By the end of this year, the company needs to be profitable. Else, it will likely be broken up by the European Commission for undermining fair competition on the market through illegal state aid.
New CEO Bernhard Osburg told the German press agency dpa that the company is planning to reduce the workforce by 6,200. The current workforce consists of some 14,000 people. The measure will affect almost all areas, including train operations, dispatching, planning, administration, sales, and IT, writes Die Zeit.
Osburg had explained that DB Cargo recorded a 2025 loss equalling “a mid two-digit million amount”, meaning around the 40-60 million euro area.
Crisis at DB Cargo
DB Cargo, Deutsche Bahn’s rail freight subsidiary, faces a crisis after years of financial struggle and a 2018 illegal state aid complaint to the EC. The EC’s 2024 investigation confirmed a profit and loss transfer agreement became unlawful in late 2021 due to DB Cargo’s deteriorating finances.
In response, DB Cargo launched a 2022 restructuring plan, aiming for a 27% workforce reduction (5,000 jobs) by 2029 and unit reorganisation. The EC approved 1.9 billion euros in conditional state aid, requiring strict adherence to the plan, including asset sales, external service use, and no expansion beyond 2023 domestic volumes. The deadline is 31 December 2026.
Despite efforts, DB Cargo posted a 357 million euros operating loss in 2024. The company floated eliminating the single wagonload segment altogether. DB Cargo’s future now depends on reaching profitability within the Commission-imposed timeline.
The CEO said that he presented a restructuring strategy with a medium-term focus extending to 2030. Experts are expected to complete their evaluation of the plan by the end of February.
DB Cargo’s four pillars of restructuring
Osburg wants to focus on four pillars: International markets, savings, a restructuring in SWL and corporate culture. In short, demand for rail transportation among Germany’s industries is weakening, so Osburg intends to focus on international markets instead. “We are significantly aligning sales, planning, scheduling, and production more strongly with European markets and are developing DB Cargo into the leading European rail logistics provider with clear, cross-border system solutions”, the CEO said.
In terms of cost savings, this is where the job cuts come in. DB Cargo wants to implement leaner administration and improve productivity. The restructuring in the SWL segment is also accompanied by severe job cuts of 2,000 positions. Osburg also plans to concentrate train formation operations at four main locations: Cologne-Bremberg, Seelze, Mannheim, and Nuremberg.
DB Cargo will continue to operate five additional shunting yards as flexible secondary locations. Of the current 27 maintenance depots, twelve are to be closed or sold.
In terms of corporate culture, Osburg said that he wants to stimulate responsibility among decision-makers at the operational level.
It is unclear if this plan will help DB Cargo succeed in becoming profitable by the end of 2026. The company still needs to clarify details, which it plans to do in summer. Gradual implementation will only start then. The single wagonload restructuring will continue into 2027.
This is terrible news for rail freight in Germany a state where a ,lot of freight travels by rail.