Global logistics firms are cutting staff after a year in which rising operating costs, softer freight demand and strategic restructuring collided to squeeze margins.
The cuts - ranging from targeted back-office reductions to mass operational reorganizations - reflect a sector scrambling to recalibrate capacity and preserve profitability as the post-pandemic boom fades.
Rising Costs Meet Slowing Demand
Companies cite a familiar mix of pressures. Labour and energy costs have climbed in many markets, contract and union settlements have increased fixed expenses, and fuel and equipment costs remain volatile.
At the same time, manufacturers and retailers are ordering fewer shipments amid slowing global trade and weaker consumer demand for non-essentials, leaving carriers with excess capacity and thinner yields. That combination is forcing executives to look for immediate savings, and headcount is often the quickest lever.
DHL scales back in Germany
DHL, Germany’s postal and parcel arm of Deutsche Post DHL Group, highlighted the trend in March when it announced plans to reduce about 8,000 roles in Germany as part of a programme to save more than €1 billion by 2027.
The company said the decision responded to falling mail volumes, higher wage costs after a deal with the Verdi union, and persistent cost inflation - concerns emblematic of the industry’s broader challenge. DHL said most of the reductions would happen through attrition rather than mass layoffs, but stressed the move was needed to stabilise margins.
US parcel carriers reshape operations
In the United States, parcel carriers have also moved aggressively. UPS has pared thousands of jobs and restructured its network this year as it shifts away from low-margin volume and invests in automation and facility consolidation to lower long-term costs.
UPS has cut or reclassified 48,000 jobs in 2025 so far as part of a sweeping transformation intended to deliver billions in savings. Industry analysts say those cuts are a response both to weaker e-commerce growth and seasonal hiring that inflated costs during prior peak seasons.
FedEx, meanwhile, has repeatedly pointed to soft freight demand and the need for structural cost reductions. Management told investors in March it was pursuing billions of dollars of permanent savings as parcel volumes and industrial activity softened.
More recently in 2025, FedEx is grappling with unexpected operational costs after the grounding of MD-11 freighters that disrupted peak-season capacity and raised short-term expenses.
Company statements and quarterly commentary show an emphasis on network optimisation and efficiency savings, with potential implications for roles in finance, procurement and certain field operations.
Forwarders Face Margin Pressure
It’s not just parcel carriers trimming staff. European freight forwarder Kuehne+Nagel announced a cost-savings programme in October that includes cutting up to 1,500 jobs after a weaker quarter squeezed operating profit.
Executives said the plan targets both headcount and efficiency improvements as the company seeks to protect margins amid falling freight rates and more cautious customer behaviour.
Structural Shifts and Automation
What’s different this time is the scale and breadth of the pressure. The rapid build-out of global logistics capacity during the pandemic - with new warehouses, additional aircraft and expanded delivery networks - is colliding with a more restrained demand environment. That has led to overcapacity in some segments and intensified competition, pushing prices and yields lower.
At the same time, companies are accelerating automation investments including sortation systems, robotics, and advanced routing software that reduce the long-term need for some roles even as they require upfront capital.
Executives insist the workforce reductions are paired with strategic investments in technology and customer service to keep operations competitive. “We’re resizing parts of our network and investing where we see growth potential, while tightening costs elsewhere,” one logistics executive told analysts, summarising a common theme across earnings calls and press releases this year.
Impact on Workers and Clients
Unions and labour groups warn that cost-cutting will erode service quality and job security unless companies carefully manage transitions and retraining. Workers displaced by cuts often face months of adjustment, even when severance, relocation or retraining packages are offered.
For shippers and consumers, the changes could mean tighter capacity in certain lanes and faster adoption of automation-driven services - a shift that reshapes both cost and the nature of logistics work going forward.
While pockets of strength remain in healthcare logistics, time-sensitive supply chains and certain regional trades, the industry’s overall tone entering 2026 is cautious: lower volumes, rising input costs, and continued pressure to deliver margins through efficiency rather than volume growth.
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