Staff cuts have dragged the local arm of delivery giant TNT into the red
The company spent almost €2 million on termination benefits as it outsourced part of its business.
THE IRISH DIVISION of international delivery firm TNT slipped into the red last year after it paid out nearly €2 million in benefits to staff who were made redundant.
New accounts for TNT Express Ireland show the company made a loss of around €250,000 in the 12 months to the end of 2015 after booking a €1.8 million profit the year before.
The turnaround came despite revenue going up from €39 million in 2014 to just over €40 million. The cost of the company’s sales increased from €25.4 million to just under €27 million during the same period.
The average number of people employed during the year fell from 193 to 188, however staff costs rose from €8 million to almost €10 million. This was primarily due to €1.83 million the company paid out as “termination benefit”.
The directors’ report said that this cost was “mainly as a result of a restructuring programme whereby the company has begun outsourcing back office functions as part of a global savings initiative”.
TNT Express Ireland initially didn’t respond when asked for more detail by Fora.
Update: A company spokeswoman this morning said the local changes were part of TNT’s global strategy to deliver “long-term profitable growth” through the consolidation and outsourcing of “certain transactional activities”.
“Certain support functions which were delivered locally were reorganised and, where appropriate, consolidated into group-wide centralised services,” she said.
The Dutch delivery group made a worldwide loss of €56 million last year, down from €192 million in 2014. TNT Express operates in more than 200 countries and maintains a leading role in the road freight network in Europe, employing 65,000 people.
Merger
TNT has faced heavy restructuring costs over the past year after it was acquired by US rival FedEx.
The €4.4 billion merger was announced last July and is nearing completion after going through a series of regulatory hoops.
FedEx is acquiring TNT Express
The deal has been approved by the US and the European Union, while last week it also got the green light from Chinese authorities. It is now expected to close during the summer.
The acquisition will create one of the largest delivery companies in the world. FedEx is now aiming to take on bigger rivals United Parcel Service and Deutsche Post in Europe.
UPS previously had a bid for TNT blocked by European regulators in 2013. This was because of concerns that it could stifle competition due to UPS’s already-strong European base.
UPS has lobbied internationally to try and block the merger between FedEx and TNT but has so far been unsuccessful.
