DHL announces 8,000 job cuts in bid to save €1 billion by 2027

DHL has announced plans to cut approximately 8,000 jobs this year as part of its cost-saving initiative aimed at reducing expenses by more than €1 billion ($1.08 billion) by 2027. The move follows a 7.2% decline in the company’s annual operating profit.

The job reductions, which account for over 1% of the global workforce, will take place within DHL’s Post & Parcel Germany division. This restructuring is a key component of the company’s “Fit for Growth” programme. CEO Tobias Meyer emphasized that the cuts will occur through natural attrition rather than forced layoffs.

Despite longstanding challenges in the Post & Parcel business due to rising costs and declining letter volumes, DHL has no plans to separate the division, Meyer confirmed. The unit currently employs 190,000 of DHL’s 602,000 global workforce.

A key factor in the cost-cutting strategy is the recent wage agreement with the Verdi labor union, which grants a 5% salary increase and additional holiday benefits. Meyer acknowledged that this agreement will add an estimated €360 million in expenses by the end of 2026.

DHL, which also operates Deutsche Post in Germany, reported earnings before interest and tax (EBIT) of €5.89 billion for 2024, slightly above market expectations of €5.81 billion. Looking ahead to 2025, the company anticipates an operating profit exceeding €6 billion, though this remains below analysts' estimates of €6.29 billion.

Meyer cautioned that economic and geopolitical uncertainties may pose risks in the coming year. “We expect the global political and economic situation to remain volatile in 2025,” he stated. The company also noted that its forecast does not yet account for potential changes in trade policies or tariffs.

Despite the cost-cutting measures, DHL remains committed to returning value to shareholders. It has proposed maintaining its dividend at €1.85 per share and expanding its ongoing share buyback programme, increasing the total buyback amount by €2 billion to reach up to €6 billion by 2026.

As DHL adapts to changing market conditions, the company’s strategic focus on efficiency and financial discipline is expected to play a crucial role in sustaining long-term profitability.