Lufthansa has confirmed that it will seek to reduce staff by 3,500 employees over the next 2 years as it looks to reduce operating expenses by €1.5 billion by 2014. The staffing reduction is expected to account for approximately 30 percent of the savings goal.

Rumors had been swirling in Germany suggesting that 5,000 jobs were at risk, so this news comes with slightly less sting. According to Lufthansa, 2500 of the job cuts will come from within Germany. The hope is that the majority of the staff reductions comes from natural attrition and early retirement offers.

In a statement by Chairman Christoph Franz, he stated “We can only safeguard jobs for the long term and create new openings if we reorganize the administrative functions and accept job losses now”.

Lufthansa has been dealing with substantial fiscal headwinds recently due to the spike in oil prices, lack of traffic growth within Europe and losses at Austrian. Additionally Lufthansa’s disposal of BMI also had a negative impact on their balance sheet for the year.