DANISH-OWNED
freight forwarder DSV Panalpina
announced that more than 3,000
employees could lose their
jobs as a result of business lost to the coronavirus outbreak.
Chief
executive Jens Bjorn Andersen
said: "This is not something we do lightly, but over 3,000 good, loyal
employees will have to leave the company - if our activity levels go up we will
add people, but when they go down it is necessary to adjust the cost
base."
He added that the company was
"aiming to reduce its cost base by 10 per cent" in response to the
decline in volumes and revenues.
Fifty per cent of the cuts were
expected in its air and sea freight forwarding division, 30 per cent from its
road transport business and the remaining 20 per cent from its contract
logistics arm, DSV Solutions, according to Mr Andersen.
The cuts would affect "every
region, every country", and CFO Jens Lund said that around 80 per cent of
the job losses would be among white-collar staff.
The timing of the job losses
would largely depend on local employment regulations, but Mr Andersen said:
"The most important thing is that we do this in a respectful manner, but
it will need to be done this year so that next year we have the full-year
effect."
The company said the redundancies
were expected to cost it around DKK1 billion (US$145 million) as it aims to
reduce its overall costs by DKK1.4 billion.
DSV Panalpina reported that
first-quarter revenue grew 36.6 per cent year on year to DKK27.3 billion, while
EBIT grew 7.6 per cent to DKK1.56 billion.
Mr Andersen said: "When this
year started, we were really looking forward to demonstrating the strength of
the DSV Panalpina combination. The Covid-19 crisis has obviously changed the
agenda and hit our markets in a severe way, but we have been able to continue
the integration as planned.
"All things considered, we
delivered satisfactory results in Q1, and our asset-light business model has
shown its strength. The crisis will have a significant impact on activity
levels in the coming months and we are taking the necessary steps to adapt,
while supporting the supply chains of our customers and ensuring the safety and
health of our employees," he added.
The company booked just under
360,000 tonnes of air freight during the first quarter, compared with 170,000
tonnes in the same period last year; in sea freight it booked 575,800 TEU, compared
with 360,000 TEU last year.
Source : HKSG.
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