German postal company DHL plans to cut 8,000 jobs in Germany this year, marking its largest workforce reduction in over two decades. The move comes in response to declining letter volumes and stringent regulations, as the company aims to balance its finances and maintain profitability amid encountering various challenges. DHL stated that it has around 600,000 employees worldwide, operating in over 220 countries and territories.
Following the announcement, shares surged to their highest level since February 6, 2024, including the projected savings exceeded by 1 billion euros ($1.1 billion) by 2027. As of 1415 GMT, shares had risen by 12.3%, making them the top performer among German blue-chip stocks.
The news agency Reuters quoted Tobias Meyer, DHL Group CEO as saying that despite increasing DHL letter postage prices, the firm has been unable to boost due to regulatory frameworks set by German regulators. As per Reuters report, the planned cuts equal to only 1.3% of the overall workforce of DHL globally, where Germany still possesses a 16.99% stake through state lender KfW. There was a visible slowdown in the DHL shares in the broader logistics sector in the previous year.
The group CEO also told the agency that the company has no intentions of separating its Post & Parcel (P&P) business despite persistent challenges for years now due to declining letter volume and cost inflation. He also referred to the "de minimis" duty exemption in the United States, which allows low-value international shipments (mostly under $800) to bring in US territory without custom duties and does not affect the companyโs business significantly. However, US president Donald Trump has paused that decision currently. Also, that firmโs business does not depend largely on whether this decision remains or gets revoked.
As per the Reuters-quoted company-provided consensus, DHL reported a 7% drop in its 2024 earnings before interest and tax (EBIT), reaching 5.89 billion euros. Despite the decline, the figure increased analysts' projections of 5.81 billion euros. Also, for 2025, the company anticipates an operating profit of over 6 billion euros, though this is less than the analysts' projection of 6.29 billion euros.
DHL Group holds two brands. The first is DHL, which offers a wide array of parcel, freight transport, express, and supply chain management offerings alongside e-commerce logistics solutions. Another one is Deutsche Post, which leads the German mail market and is the largest postal service provider in Europe.
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