DHL to Cut 8,000 Jobs After Operating Profit Declines by 7.2% in 2024

German logistics giant DHL Group plans to cut around 8,000 jobs this year after reporting a 7.2% decline in annual operating profit on March 6.

The layoffs will impact its Post & Parcel Germany division, which handles mail and parcel delivery within Germany and internationally.

DHL CEO Tobias Meyer told Reuters that the job cuts will occur through attrition rather than compulsory redundancies. DHL employs around 602,000 people globally, including 190,000 staff in its Post & Parcel Germany unit.

The company aims to save more than $1.08 billion by 2027 through these reductions.

"The business model of Post & Parcel Germany has faced significant challenges over the years. For instance, letter volumes declined by 20.3% between 2022 and 2024, while cumulative inflation during the same period reached 15.8%. At the same time, the Federal Network Agency only permitted the division an average price increase of 4.6% between 2022 and 2024," said Meyer.

He added that a recent wage agreement with workers is also set to increase employment costs by 5% over 24 months.

Declining Profits Weigh on Jobs

The Verdi labour union has condemned DHL's planned job cuts, blaming regulation and low stamp price increases. Analysts predict slower profit growth for logistics companies in 2025 due to softer demand and easing supply-chain disruptions, with cost-cutting measures expected.

However, DHL’s CEO noted that the company has minimal exposure to US President Donald Trump’s decision on duty exemptions for low-value packages.

"Currently, we expect a persistently muted macroeconomic environment for 2025. Economic uncertainty and volatility are expected to continue, which may present challenges but also create business opportunities for DHL Group," he said.

DHL reported a 9.3% decline in net profit to €3.3 billion in 2024, while revenue rose 3% to €84.2 billion. Earnings before interest and tax fell 7% to €5.89 billion, though still surpassing analyst expectations.

Looking ahead to 2025, DHL forecasts an operating profit of over €6 billion, slightly below analyst estimates. The company also increased its share buyback program by €2 billion to €6 billion.