DHL to save €1.1 billion by 2027 with 8,000 job cuts, shares rise

DHL announced plans on Thursday to cut about 8,000 jobs in Germany this year as part of a strategy to save more than 1 billion euros (HK$8.4 billion) by 2027, after the logistics group reported a 7 percent fall in annual operating profit.

Shares jumped by around 10 percent to their highest in three years by 1826 HKT.

The Verdi union criticised the planned job cuts and urged politicians to act, denying that its wage agreement on March 4 prompted the layoffs. The union blamed regulations and insufficient stamp price increases.

Earlier DHL chief Tobias Meyer told Reuters the agreement, costing the group 360 million euros by 2026, was behind the job cuts.

The company does not expect any conflict with Verdi, DHL CFO Melanie Kreis said during an analyst call.

Logistics companies are likely to see slower profit growth this year due to softer demand and easing supply-chain disruptions, Parash Jain, HSBC's (0005)global head of transport and logistics research, said ahead of the results.

Jain expects transportation companies to cut costs, with growth in global container trade and air freight tonnes expected to halve in 2025.

The company does not have much exposure to US President Donald Trump's pause on the decision to scrap "de minimis", duty exemption for low-value packages, Meyer said on the call.

DHL shares underperformed the wider logistics sector over the past year, falling nearly 11 percent by Tuesday.

Meyer said there were no plans to separate the P&P business, although it has struggled for years with cost inflation and declining letter volumes.

DHL logged 5.89 billion euros in 2024 earnings before interest and tax, surpassing analysts' expectations of 5.81 billion euros in a company-provided consensus.

For 2025, the group expects an operating profit of more than 6 billion euros, which is below analysts' expectations of 6.29 billion euros. The forecast does not account for potential impacts from changes in tariff or trade policies.

DHL maintained a 1.85 euro dividend per share for 2024 and increased its share buyback program by 2 billion euros to 6 billion euros, extending it until 2026.

REUTERS