DHL to cut 8,000 jobs in Germany as part of $1.4b cost-saving strategy
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Logistics firms are cutting costs as growth in container trade and air freight tonnes is expected to halve in 2025.
PHOTO: REUTERS
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BONN, Germany – DHL unveiled plans on March 6 to cut about 8,000 jobs in Germany in 2025 as part of a strategy to save more than €1 billion (S$1.4 billion) by 2027, after it reported a 7 per cent fall in annual operating profit.
The job cuts, representing more than 1 per cent of the logistic company’s total workforce, will occur in the Post & Parcel (P&P) Germany division through attrition, rather than compulsory redundancies, DHL chief executive Tobias Meyer said.
Logistics firms are likely to see slower profit growth in 2025 due to a normalisation of yields, softer demand and easing supply-chain disruptions, Mr Parash Jain, HSBC’s global head of transport and logistics research, said ahead of the results.
Mr Jain expects logistics firms to cut costs, with growth in global container trade and air freight tonnes expected to halve in 2025.
DHL shares have underperformed the wider logistic sector over the past year, falling nearly 11 per cent by March 4.
Mr Meyer said there are no plans to separate the P&P business, although it has struggled for years with cost inflation and declining letter volumes.
The new stamp price guidelines approved by Germany’s network regulator are insufficient to address these issues, according to Mr Meyer.
He cited the recent wage agreement with the Verdi labour union, which includes a 5 per cent wage increase and more holidays, as a reason for the job cuts. The agreement will cost DHL about €360 million by the end of 2026, according to Mr Meyer.
DHL logged €5.89 billion in 2024 earnings before interest and tax, surpassing analysts’ expectations of €5.81 billion in a company-provided consensus.
For 2025, the group expects an operating profit of more than €6 billion, which is below analysts’ expectation of €6.29 billion. The forecast does not account for potential impacts from changes in tariff or trade policies.
DHL continues its investor return policy by proposing a stable dividend of €1.85 per share for 2024 and increasing the share buyback programme launched in 2022 by €2 billion to up to €6 billion and extending it until 2026. REUTERS
