Layoffs see DHL's pretax losses double

REDUNDANCY COSTS of €16.5 million for 300 staff at the Irish arm of international distribution firm DHL contributed to the doubling of the company’s pretax losses last year to €26 million.

Accounts just filed to the Companies Office show DHL Express (Ireland) Ltd’s pretax losses increased 103 per cent from €12.7 million to €26 million to the end of last December.

The figures show the German-owned firm’s revenues fell 28 per cent last year, from €147.9 million to €106 million, after it moved to scale down its domestic delivery service in Ireland. The restructuring resulted in almost 40 per cent of the firm’s 792 workers losing their jobs.

The redundancy payments of €16.5 million accounted for 72 per cent of the overall charge of €22.7 million for restructuring last year.

The restructuring also involved the closure of five DHL service centres. The directors blamed the deepening recession in Ireland for last year’s changes.

According to their report: “While these actions were very regrettable, they were entirely necessary to secure the business for the future.” They said the restructuring plan announced in May 2009 was developed to “maximise operational efficiencies and in so doing underpin the long-term sustainability of the business in Ireland”.

They added that “despite the very difficult circumstances, continuity of service for all customers was maintained throughout the restructuring period, which is testament to the professionalism of all staff”.

The restructuring also involved the company strengthening its international express services into and out of Ireland.

On DHL’s future developments in Ireland, the directors state “while there is no immediate sign of improved economic conditions in the early part of 2010, the company believes that following on from its restructuring activity in 2009, it is well positioned to take advantage of any upturn as and when it may occur”.

The accounts show that the company’s operating losses last year increased by 119 per cent from €11.5 million in 2008 to €25.2 million last year.

Staff costs last year fell from €37.6 million to €28 million, with the number of staff cut from 792 to 603 at the end of 2009. However, the figures show that the number employed in “management and administration” rose from 222 to 238.