Dutch package delivery company TNT Express NV (TNTEF.PK,TNTEY.PK) announced Monday an accelerated reorganization plan for its Italian business unit to reflect the deterioration of Italian trading and economic environment. The move, which will see the axing of 850 jobs in Italy, is in line with TNT's larger Deliver! improvement program that was announced in late March.
TNT's overall Deliver! improvement program envisages a profit improvement plan for the periods between 2013 and 2015, which is expected to affect 4,000 positions throughout the firm. The plan will see TNT adapt an operating model that will improve cost efficiency, targeting recurring savings of 220 million euros by 2015. It will also see 200 million euros in additional investments in 2013 to 2015.
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.
The current accelerated reorganization plan will increase efficiency of Italian operations by implementing significant measures to increase productivity and reduce costs in order to secure long-term market-leading position in Italy. The plan is also expected to see the axing of about 850 positions at all levels. TNT Express employs about 3,000 people in Italy.
TNT will reorganize its overhead and supporting activities as well as combine its smaller Italian operations into larger depots at strategic locations throughout the country. The company expects about 20 facilities across Italy to be affected, while maintaining service levels and full network connectivity.
TNT Express engages in domestic and intra-European deliveries, with top-three positions in major European markets. The company aims a leaner organization and reduce costs amid challenging trading conditions and continuing price pressure. The company also announced the sale of China Domestic on March 28 and sale process for Brazil Domestic is underway.
The Deliver! improvement program was launched in March following the January 31 withdrawal of United Parcel Service Inc.'s (UPS) $6.77 billion merger offer with TNT after the European Commission formally prohibited the deal, citing competitive concerns.
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.
In Amsterdam, the stock is currently trading at 5.75 euros, unchanged from the previous close.
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by RTT Staff Writer
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