DHL CEO Tobias Meyer has confirmed the company will cut 8,000 jobs in its Post & Parcel Germany division this year as mail volumes continue to decline and it reports a 7.2% drop in annual operating profit.
The announcement came as the company released its financial results for 2024, which saw revenue rise by 6.4% to €22.7bn (US$24.6bn) in Q4 compared to the same period in 2023. However, overall consolidated net profit for 2024 fell by €400m (US$434m) from €3.7bn (US$4.01bn) in 2023 to €3.3bn (US£3.58bn) and operating profit (EBIT) was 7.2% down year-on-year at €5.9bn (US$xxbn).
“We increased our revenue in 2024 despite the challenging environment. In a strong fourth quarter with good service for our customers, we achieved substantial revenue and earnings growth,” commented Meyer. “We expect the global political and economic situation to remain volatile in 2025. However, we want to continue growing in this environment and are focusing on the measures we can control. We are actively increasing our efficiency and accelerating our sustainable growth ambitions with our Group cost program, ‘Fit for Growth’.”
The Fit for Growth program is part of the 2030 strategy, by which the company aims to become leaner and more efficient. It includes improving its cost base by more than €1bn (US$1.08bn) as well as various measures across all business units that will be fully realized in the 2027 financial year. These measures include reducing 8,000 jobs in the Post & Parcel Germany division in a “socially responsible manner” in 2025.
Speaking in an interview with DHL Group News, Meyer continued, “Fit for Growth is a global, company-wide program that involves contributions from all divisions and the corporate headquarters. For instance, at Express, we will optimize our network of partner airlines. Additionally, we are focusing on automation and digitization in our operations across all divisions, along with the integration of artificial intelligence in customer service. At Post & Parcel Germany, we will structurally reduce around 8,000 positions in a socially responsible manner in 2025.”
The restructuring is in response to a continuing decline in letter volumes, which fell 20.3% between 2022 and 2024. Cumulative inflation during the same period reached 15.8% while the Federal Network Agency only allowed the division to increase prices by 4.6%, Meyer said.
“In addition, the recently concluded collective wage agreement stipulates a total wage increase of 5% over 24 months. This alone will result in structural burdens of around €360m [US$391m] in 2026, within the current price regulation period,” he added.
“Although the profitable parcel business continues to grow, it cannot compensate for the decline in the postal business and the ongoing cost pressure. Given this overall situation, it is crucial to stabilize the division’s profitability to secure its future. In fact, we are already reinvesting everything that Post & Parcel Germany earns back into the business, and the division does not contribute to the dividend, nor do we expect it to,” he said.
Read the full interview with Meyer here, and see the full annual results here.