DHL to cut 8,000 jobs amid profit decline
What's the story
DHL has announced plans to lay-off around 8,000 employees this year. The decision is part of the company's "Fit for Growth" strategy, which aims to save over €1 billion ($1.08 billion) by 2027. The move comes after the German logistics giant reportedly saw its annual operating profit drop by 7.2%. The company has a workforce of about 602,000 people across over 220 countries and territories globally.
Impact
Job cuts to affect Post & Parcel Germany division
The upcoming job cuts will affect the Post & Parcel Germany division the most, making up more than 1% of DHL's entire workforce. There are about 190,000 employees in the Post & Parcel Germany unit alone. DHL's CEO, Tobias Meyer, shared his thoughts on the current economy. He said, "We expect the global political and economic situation to remain volatile in 2025."
Financial outlook
DHL's financial performance and future expectations
In a tough economic environment, DHL posted earnings before interest and tax (EBIT) of €5.89 billion in 2024, exceeding analysts' expectations of €5.81 billion. For 2025, the company expects an operating profit of more than €6 billion, missing analysts' forecast of €6.29 billion. These projections do not take into account the potential impact of changes in tariff or trade policies.
Investor returns
DHL maintains dividend and expands share buyback program
Despite the job cuts and lower profit expectations, DHL sticks to its policy on investor returns. The company has proposed a stable dividend of €1.85 per share. Further, it plans to increase the share buyback program launched in 2022 by €2 billion to up to €6 billion and extend it till 2026. This move highlights DHL's commitment to preserving shareholder value amid economic challenges.