The struggling German retailer KarstadtQuelle has agreed a deal with employee representatives on a cost-cutting plan that will include the loss of some 5,500 jobs and a three year pay freeze. KarstadtQuelle employs 100,000 people and is a household name in Germany. The company’s chief executive Christoph Achenbach said the company had achieved its objective of saving some 760 million Euros for the years 2005, 2006 and 2007.
Around 4,000 jobs are likely to go at the company’s department stores, with another 1,500 going at its mail order operation. Hit by a persistent slump in German retail demand, last month the company announced plans to sell 77 of its 181 department stores. The union wanted to secure jobs and keep the stores open.