TNT Express to cut 4,000 jobs as part of restructuring
25 Mar 2013
TNT Express NV, Europe's second-largest package-delivery company, today said that it would cut 4,000 jobs as part of restructuring after regulators blocked its $6.85-billion merger with United Parcel Service (UPS).
Apart from cutting 6 per cent of its 68,628 global workforce, the Netherlands-based company will also introduce a new management structure, divest its operations in China and Brazil and reduce its intercontinental air capacity.
All these measures will bring in annual savings of €220 million ($286 million) by 2015, and involve a one-time restructuring charge of €150 million.
TNT Express said it would focus on Europe and on connecting Europe with the rest of the world, where it generates around €4.6 billion, or 63 per cent of its annual revenues of little over €7 billion.
The restructuring has come two months after UPS abandoned its bid to acquire TNT Express on EU regulatory issues. (See: UPS withdraws $6.85-bn offer for TNT Express as EC refuses approval) If completed, the deal would have been the Atlanta-based company's largest acquisition in its 105-year history after it purchased Overnite Corp in 2005 for $1.2 billion.
TNT has fully owned operations in 65 countries and delivers documents and parcels to over 200 countries. The company has a fleet of 26,000 trucks, 47 cargo planes and has a worldwide network of more than 2,400 depots and hubs.
Since the spin-off of its express unit and mail businesses PostNL in 2011, TNT's market value has sunk amid profit warnings. It posted a net loss of €83 million in 2012 on revenues of €7.3 billion and its market capitalisation had slumped to €3.25 billion from €7 billion in December 2010.
Commenting on the restructuring, Bernard Bot, interim CEO of TNT said, ''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 recognised dedication to customers.''
''We are, therefore, taking immediate steps to reshape our portfolio, make the company leaner and pursue efficiencies in operational and supporting processes,'' he added.
TNT said that the sale process of its unprofitable Chinese operations is underway and the outcome should be known soon, while it has started preparing for the sale of its loss-making Brazilian domestic business.
TNT is also exploring options to reduce its exposure to intercontinental capacity, including capacity-sharing agreements, subleases and lease terminations.
TNT will bring in a new management structure and the heart of the new organisation will be the executive board and a global functional board with cross-company responsibilities.
The previous regional structure will be unwound. The new business units comprising Australia/New Zealand, Benelux, France, Emerging, Europe/Americas, Germany, Italy and UK/Ireland will report directly to the CEO.
