Deutsche Bahn, Germany's state-owned rail operator, is to cut 20% of its staff, according to a press report.
Deutsche Bahn's reputation is in the doldrums
The firm, which is tipped for future privatisation, could shed up to 40,000 workers in an effort to boost efficiency, financial newspaper Handelsblatt reported.
Deutsche Bahn has already reduced its workforce by more than 40% over the past decade.
The company refused to confirm exact figures, but agreed with the proposition that it could run with 10-20% fewer employees.
Lean and mean
Radical job cuts have been expected at Deutsche Bahn, which is desperately attempting to get itself into shape for privatisation.
The company's chairman, Hartmut Mehdorn, a close ally of Chancellor Gerhard Schroeder, has committed himself to modernising its business practices.
But he has caused intense disquiet among staff, and damaged Deutsche Bahn's once-solid reputation for reliability and safety.
Earlier this year, Deutsche Bahn was voted Germany's most despised company, and passenger traffic fell 10% year on year, as travellers shifted to the motorways.
Poor performance is likely to mean that Deutsche Bahn privatisation will be postponed to 2006 at the earliest.