KLM urges staff to cut costs as coronavirus effect hits business

KLM has announced budget cuts in response to a slowdown in business resulting from the coronavirus outbreak, according to a report in Reuters.

KLM, part of the Air France KLM Group, will cut back on hiring new staff and external consultants, delay new IT projects and office refurbishment plans and reduce travel expenses significantly, chief financial officer Erik Swelheim said in an internal letter to management.

“The impact [of the coronavirus outbreak] on KLM’s revenues will be very significant and will only partly be mitigated by lower costs and a lower fuel price,” he said.

“We urge you all to reduce your cost levels to a minimum level to ensure safe operations. Only ‘must-do’ expenditure is allowed.” Staff have been asked to take vacation days to reduce spending, as flight schedules continued to be hurt by reduced air travel.

KLM has shut down routes to China until the end of March and Air France KLM warned that costs could run up to 200m euros by April.