Deutsche Post Plans to Eliminate 8,000 Jobs Amid Industry Changes

In a significant restructuring effort, Deutsche Post has announced plans to reduce its workforce by 8,000 positions in Germany by the end of the year. This decision affects the company's letter and parcel delivery services, which employed approximately 187,000 individuals at the start of the year. The reduction corresponds to about four percent of the overall workforce.

The company aims to implement this job cut in a socially responsible manner while seeking to streamline operations and enhance efficiency. This initiative is part of a broader cost-saving program that also impacts its global logistics subsidiary, DHL, which has a workforce of around 600,000 employees worldwide.

Concerns have been raised regarding the potential for further job reductions. The Chairman of the Works Council expressed fears that this may only be the beginning, stating that additional layoffs could be forthcoming within the year. These potential cuts could affect positions that are subject to social insurance and collective bargaining agreements.

The apprehension surrounding further job losses is attributed to a recent legislative reform that exempts smaller competitors from value-added tax, a benefit previously exclusive to Deutsche Post as a universal service provider. This change allows regional competitors to operate with a cost advantage, placing pressure on Deutsche Post to remain competitive.

In response to these developments, the Works Council has called on the federal government to address the "unfair price competition" that has emerged from this legislative change. The council argues that Deutsche Post incurs higher operational costs as a universal service provider and is seeking to reinstate the previous tax advantages.

Financially, Deutsche Post's mail and parcel division reported revenues of approximately EUR17.3 billion, marking a 2.7 percent increase; however, operating profits declined by 5.6 percent to EUR821 million. The ongoing transition to digital communication has led to a sustained decrease in letter volumes, while parcel deliveries have seen growth.

The core postal business in Germany has faced mounting challenges as more lucrative opportunities have emerged in other sectors such as express deliveries and logistics services. These segments have proven to be more profitable, although they too have begun to feel the impact of a slowing economy and geopolitical tensions.

Looking ahead, the management at DHL remains cautious, anticipating a challenging macroeconomic environment. The company expects a volatile global economic landscape to persist into 2025.

In a related development, the announcement of job cuts follows closely on the heels of a new collective bargaining agreement with the union Verdi, which secured a pay increase for around 170,000 employees in the logistics sector. The agreement includes an initial wage increase of 2 percent, followed by an additional 3 percent in the subsequent year, along with extra vacation days for long-serving employees.

Criticism has emerged from political circles, particularly from members of the Social Democratic Party (SPD), who described the job cuts as a severe blow to employees and their families. They emphasized the historic significance of Deutsche Post and the importance of protecting jobs as a priority for future governments.