TNT To Cut 6,500-7,000 Jobs

April 3, 2007
Company facing increasing competition from Internet

The logistics group TNT Post said April 3 that it would cut between 6,500-7,000 jobs in a reorganization of its Dutch mail operations that face increasing competition, in part from the Internet. The number could rise to 11,000 if an agreement on job flexibility is not reached with unions, the Dutch group added.

TNT's planned measures were designed "to safeguard its success in the longer term in a postal market that is experiencing declining volumes and increasing competition," a statement said.

The job cuts were to be implemented from now until 2010 as part of a drive to achieve 300 million euros (US$400 million) in savings that got underway in December. "Employee wages will be, at best, frozen at the present level for the next two and a half years," a statement said, with the company adding that it and workers had to choose the lesser of two evils, the other being bigger job cuts.

TNT currently employs 58,000 people in the Netherlands, including 25,000 delivery staff who were expected to bear the brunt of the new measures.

Postal services have seen the emergence of low-cost carriers and TNT has launched its own unit, Netwerk VSP, in part to compete against Internet rivals that have won contracts to distribute items such as income tax declarations.

In 2006, TNT posted a 1.7% increase in net profit at 670 million euros, though fourth quarter profit leapt by 75% to 189 million euros compared with the last three months of 2005.

Copyright Agence France-Presse, 2007

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