German postal company Deutsche Post announced on Thursday that it will cut 8,000 jobs by the end of the year, citing high costs.
The cuts, affecting about 4% of the domestic letter and parcel division's 187,000 employees, will be carried out in a socially responsible manner, the company said.
Deutsche Post said the move is part of a broader cost-cutting program to improve efficiency.
The savings program also extends to other areas of the globally operating logistics giant DHL Group, which has its German division operating as Deutsche Post and employs about 600,000 people worldwide.
The group is grappling with rising costs. While its revenue increased by 3% to 84.2 billion Euros ($90.9 billion) last year, operating profit (EBIT) fell by 7.2% to 5.9 billion Euros.
The cost-cutting measures are expected to generate savings of more than 1 billion Euros.
The company's Post & Parcel Germany division reported a turnover of 17.3 billion Euros, up 2.7%. However, the operating result dropped 5.6% to 821 million Euros.
The decline is attributed to the long-term reduction in letter volumes, exacerbated by a significant drop in advertising mail last year, the company said, adding that parcel volumes saw an increase.
The company's core business in Germany has long been a concern for the global group, with other business areas such as express deliveries, supply chain services and the freight business proving to be more lucrative.
However, these divisions also feel the effects of the broader economic downturn and ongoing geopolitical tensions.
Looking forward, DHL's management remains cautious, citing a "subdued macroeconomic environment."
"We expect the global political and economic situation to remain volatile in 2025," said Tobias Meyer, chief executive of DHL Group.
The announcement of the job cuts comes after postal workers reached a collective bargaining agreement on Tuesday, with wages set to rise by 2% in April.
The deal, announced by Deutsche Post and the Verdi trade union, will give some 170,000 workers an immediate salary boost next month, followed by a further 3% rise in April 2026.
After the agreement was announced on Tuesday, Nikola Hagleitner, the responsible DHL board member for Post & Parcel Germany, stated that due to the economic environment and the collective agreement, "cost-cutting measures will have to be consistently expanded and accelerated."
