Swiss logistics company Panalpina Welttransport Holding, which was acquired by DSV in 2019, has made the decision to cut over 4,000 jobs from the European freight forwarding company DSV Chief Financial Officer Jens Lund said in an interview Thursday.
“It’s down to efficiency,” Jens said.
“Panalpina was still making a small margin, but it was not competitive…Before you can start to grow, you right-size the business. If you don’t have the right structure, then there will be a lot of inefficiency, and you know what? Customers don’t want to pay for that.”
The Panalpina acquisition will cut costs from consolidating operations, logistics facilities, administration and information technology. A total saving of about 2.3 billion Danish kroner (AU$500 million).
Jens wants to focus on “normal operations from 2021 and onwards” following the company’s air and ocean freight integration this year.
The deal had an enterprise value of about 5.4 billion Swiss francs (AU$8.3 billion), DSV said in August, when the transaction closed.
According to the company’s 2019 annual report, the combined DSV Panalpina reported 94.7 billion Danish kroner in revenue for fiscal 2019, and 3.7 billion Danish kroner in profit.
The Wall Street Journal reported that DSV has grown through a series of acquisitions, including its 2016 purchase of U.S.-based logistics operator UTi Worldwide for $1.35 billion.
Denmark-based DSV has operations in more than 90 countries.