TNT Express plans to layoff 850 workers in Italy and combine its smaller operations in the country into larger outposts at strategic locations.
The moves, which are part of the company’s "Deliver!" reorganization program, will affect 20 Italian facilities.
Service levels and network connectivity will not be affected by the downsizing, company officials said. TNT Express is also planning on investing in depot sorting and IT at the remaining facilities.
“The difficult economic circumstances and trading conditions in Italy require TNT Express to implement significant measures to increase productivity and reduce costs. The goal is to secure TNT Express’ long-term market-leading position in Italy,” according to a company statement.
Announced in March, Deliver! is the company’s attempt to generate 220 million euros ($283 million) in savings by 2015. To achieve this, 4,000 positions will be eliminated, and the company will move away from domestic operations in China and Brazil, which have already been sold off.
As part of the new look at TNT, officials are planning to invest 200 million euros in automation and network optimization. But to reach its savings targets, officials will have to streamline support functions, optimize infrastructure and create shared-service centers for administrative tasks, the company said. TNT will also operate under a new management structure that will eschew the previous regional reporting scheme.
"Successful execution will be critical to improving our performance," Interim Chief Executive Officer Bernard Bot said during the unveiling of the new restructuring plan. "The 'Deliver!' improvement program we are launching will create a more focused, efficient and profitable TNT Express.”
TNT Express was dealt a huge blow when its proposed merger with UPS fizzled out. After months of speculation, the European Commission blocked the deal, saying it would leave DHL as the only non-UPS option in some of Europe; this, the commission reasoned, would lead to price increases for consumers. Even with UPS agreeing to sell off parts of
TNT in the countries at question, the commission found it was not
enough to save the merger. - Jon Ross