KarstadtQuelle and its union made no progress towards agreeing on labour cost cuts of 500 million Euros, something the ailing retailer needs to help raise capital and retain the support of its banks.
Company spokesman Joerg Howe said that some hard choices needed to be made. “We can’t do both,” he said. “We can’t remain with the previous benefits and wages on the one hand and make it without layoffs. If we, in the broadest sense, set aside layoffs brought about by the economic situation, there have to be cuts in benefits, that concretely means wage cuts for the employees.” Karstadt is under pressure to cut costs to head off a threat of insolvency. According to the company, its 100,000 workers would need to take a pay cut of 5 to 10 percent and there still might be job losses. But for the union’s official negotiator, Franziska Wiethold an agreement on changing the terms of employment for staff would have to guarantee all shops remain open and no jobs are lost. Karstadt is a household brand-name in Germany that was first established in the 1880s. It is trying to set its house in order to combat flagging sales and rising losses.