Deutsche Bahn’s new chief executive, Evelyn Palla, has secured the backing of the supervisory board for her overhaul of the group. From 1 January, Deutsche Bahn will adopt a more decentralised structure, and a significantly leaner management setup. At least 30% of leadership positions at the holding company will be eliminated. An entire intermediate management layer between the management board and the first tier of executives will be scrapped, while the number of organisational units at the first management level will be almost halved, from 43 to 22.

As previously reported, the group-level board portfolios for Digitalization and Technology, and Infrastructure, will also be dissolved. Management boards within the individual business units are set to be slimmed down as well. „The path is clear for a fresh start“, said Palla. She stressed that commercial decision-making and responsibility for operational quality would be shifted back to the individual business units and regions. Group-wide steering programmes would be discontinued, she added, with the ongoing restructuring and cost-cutting programme „S3“ to be wound up at the end of the year.

From 1 January, however, three immediate programmes will be launched – initiatives already announced by transport minister Patrick Schnieder (CDU) – into which Deutsche Bahn will invest 140 million euros. The focus will be on improving comfort on long-distance trains, enhancing customer communication, and boosting safety and cleanliness at stations.

Punctuality in long-distance services will nevertheless remain at a very low level for the time being. Palla noted punctuality figures had been „in free fall“ for three years, a trend that had continued in 2025. The immediate goal for next year is to stabilise long-distance punctuality at around 60%, with a target of reaching 70% by 2029.

According to Palla, the transformation of Deutsche Bahn might turn out to be the most sweeping in the group’s history – but she urged patience. There would be „no big bang“, she said. Rail services could not be improved overnight, even with significantly increased federal funding. Instead, the overhaul would be „a journey of many small steps“.

It remains unclear how the group’s struggling freight subsidiary, DB Cargo, will be handled. It has been excluded from the current reorganisation, as a comprehensive stand-alone turnaround plan is still being prepared. This plan is due to be reviewed in January or February by consultants from Oliver Wyman. A previous restructuring proposal for DB Cargo had been criticised by external experts as insufficient. Under requirements set by the European Commission, DB Cargo must return to profitability by 2026 or face the prospect of being broken up.

Palla reiterated that Deutsche Bahn is expected to return to operating profitability this year, with operating earnings set to rise further in 2026. In the first half of the year, operating loss before interest and tax still amounted to 239 million euros, despite a marked improvement on the previous year. She acknowledged, however, that a positive net result is unlikely before 2027.

The railway and transport workers’ union EVG has broadly voiced its support for Palla’s plans. The concept was ambitious, stated EVG leader Martin Burkert – „and rightly so“. If Palla succeeds in abolishing unnecessary layers of hierarchy, shortening decision-making processes and strengthening experts on the ground, the union would stand by her, he said. At the same time, Burkert made clear that if the overhaul ultimately turns into a cost-cutting exercise involving job losses, Palla would face stiff opposition from the EVG.