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TNT Express To Cut 4,000 Jobs, Reveals 3-Year Restructuring Plan

3/25/2013 5:43 AM ET

Dutch package delivery company TNT Express NV (TNTEF.PK,TNTEY.PK) Monday revealed its profit improvement plan for the periods between 2013 and 2015, which is expected to affect 4,000 positions throughout the firm. The company said it aims a leaner organization and reduce costs amid challenging trading conditions and continuing price pressure.

The company anticipates restructuring costs of 150 million euros in the period. It targets 220 million euros in recurring savings by 2015 as a result of its cost efficiency program.

As per its updated strategy called 'Deliver!,' the firm intends to better leverage its unique competitive position, particularly in Europe, and operate its business more efficiently. TNT Express engages in domestic and intra-European deliveries, with top-three positions in major European markets.

By 2015, TNT Express sees an adjusted operating income margin of around 8 percent and sales growth for the period of nearly 2 percent.

The company noted that it has proceeded with process of divesting its domestic operations in China and Brazil, as a result of its focus on Europe and connecting Europe with the rest of the world. Brazil Domestic's losses have reduced in the first two months of 2013, it said.

It also aims investing in infrastructure and in business supporting and customer IT. Total investments for the period to the end of 2015 are estimated at around 200 million euros.

Bernard Bot, interim CEO of the company stated, "Our business faces difficult market conditions and strategic challenges but we have a unique competitive proposition: an unrivalled European network, worldwide connections, an integrated range of services and recognized dedication to customers. Our updated strategy builds on these strengths."

TNT Express had earlier announced the appointment of Tex Gunning as chief executive, effective June 1. The CEO post became vacant after Marie-Christine Lombard resigned in September 2012 to pursue a career outside TNT Express.

The company said it will engage in discussions with employees, works councils and unions regarding consequences of the job cuts and the best possible solutions.

TNT Express, however, sees the economic climate to remain uncertain with limited visibility on the future.

Last month, the company, whose $6.77 billion merger offer with United Parcel Service Inc. (UPS) failed recently, reported a narrower loss for the fourth quarter and full year.

In Amsterdam, the shares are currently trading at 5.93 euros, up 0.44 percent.

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by RTT Staff Writer

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