German logistics giant DHL announced on Thursday (March 6) its plan to cut 8,000 jobs domestically in 2024, marking its largest downsizing initiative in at least 20 years.
According to Reuters, DHL stated that this move is in response to declining mail delivery volumes and overly strict regulatory policies. The company aims to achieve over €1 billion (approximately $1.1 billion) in cost reductions by 2027.
Following the announcement, DHL’s stock price surged to its highest point since February 6, 2024. As of 14:15 GMT, DHL shares rose by 12.3%, making it the best-performing company among Germany’s blue-chip stocks that day.
DHL CEO Tobias Meyer mentioned that despite recent postage price increases, profitability has not significantly improved due to restrictions imposed by German regulatory authorities.
Over the past year, DHL’s stock performance has lagged behind the industry average, primarily due to cost escalations and decreased mail and parcel volume, putting pressure on profits. Nonetheless, Meyer indicated to Reuters that there are currently no plans to spin off the mail and parcel business.
The job cuts represent only 1.3% of DHL’s global workforce, while the German government still holds a 16.99% stake in DHL through the state-owned bank KfW (Kreditanstalt für Wiederaufbau).
Parash Jain, global head of transportation and logistics research at HSBC, stated that due to weak demand and eased pressure on supply chains, logistics companies can expect slower profit growth this year. He forecasted that the growth in global container trade and air freight volume in 2025 will halve, leading transportation companies to further reduce costs.
DHL reported a 7% decrease in earnings before interest and taxes (EBIT) in 2024, amounting to €5.89 billion, surpassing analysts’ forecast of €5.81 billion.
For 2025, DHL anticipates operational earnings to exceed €6 billion, falling short of market analysts’ expectation of €6.29 billion. This projection does not factor in the potential impact of changes in tariffs or trade policies.