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TNT Express cuts jobs after takeover blocked

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TNT Express cuts jobs after takeover blocked
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Dutch delivery firm TNT Express is to cut 4,000 jobs – six percent of its work-force – and focus on Europe after a failed takeover bid by United Parcel Service.

The layoffs are aimed at saving 220 million euros by 2015, and will mean a 150 million euro restructuring charge.

Roughly two-thirds of the jobs will go in Europe, where the company generates the bulk of its sales and where economic conditions are tough.

Last year nearly two thirds of its 7.3 billion euros revenue came from Europe, the Middle East and Africa.

TNT Express, facing overcapacity and rapidly eroding prices in Europe, had focused on a strategy in which UPS would be help it cope with difficult markets, but will now have to face the future alone.

That is because UPS’s bid was blocked by the European Union Commission in January due to concerns it would have too dominant a market position. TNT Express said it did not expect offers from other rivals and is not a break-up target.

“The business we have is the business we have, in terms of its geographic scope, and that’s where we are going to focus, improve, and try to get the best possible margins,” interim chief executive Bernard Bot told journalists.

“But yes, we also have to accept that we are a cyclical stock and are to some expect dependent on the economic development.”