DSV, which finalized its acquisition of Panalpina in AUG19, thus creating the world’s second largest freight-forwarding company, has this week informed staff at Panalpina’s former headquarters in Basel about its on-going restructuring plans which may mean a reduction of up to 165 local jobs by the summer of 2020.
The changes come as DSV looks to streamline corporate functions, reducing inevitable overlaps existing because of the similar structure of the previously two separate companies.
"As we integrate Panalpina into the DSV Panalpina Group, we recognize that there are substantial duplications of corporate functions," says Jens Bjørn Andersen, CEO, DSV Panalpina. "We are also seeing considerable overlaps in the IT department, as IT systems that will no longer be used in the combined group are phased out. As a result, we are considering several restructuring measures. According to our analysis, we will not be able to avoid job cuts and the relocation of positions to DSV Panalpina's headquarters in Denmark."
Employees were told that certain jobs may be cut altogether or relocated to the DSV headquarters in Denmark. Around 50% of the workforce will remain, including key functions in Sales, Operations, IT and Innovation. Restructuring should be complete by the end of the second quarter of 2020.
The importance of Basel is recognized and will be retained
While the endeavors to eliminate parallel functions are a necessary strategic step in ensuring cost-efficient processes in future, DSV Panalpina is focused on two important issues: 1) mitigating the job-loss effects for those affected, and 2) retaining a strong business presence in the Basel area.
To this end, DSV Panalpina is working on a social plan to do everything possible to find appropriate solutions for all affected staff. They have initiated a consultation process in line with the Swiss labor law, and the Group CFO, Jens H. Lund last week invited staff to vote on the election of an employee representation body for the negotiations of the social plan proposal, underlining the company’s commitment to do everything reasonably possible to reduce and alleviate the effects of the job losses.
As regards retaining and developing DSV Panalpina’s commercial and operational presence in Basel, Jens H. Lund stated that the company had established contacts with key representatives of the Department of Economic, Social and Environmental Affairs of the Canton Basel-Stadt to explore opportunities for investment in the Basel area.
Swiss cargo giant turns Danish
Panalpina was the world’s 4th largest freight forwarding company in 2018 before it was bought by DSV in 2019 – at the time, DSV held 9th place on the global top 50 list. With the merger, Switzerland loses a key national player, retaining only 2 nationally based freight forwarding companies in the top 50 – namely Kuehne & Nagel Inc. and Agility Logistics. Though the company operating under the name DSV Panalpina, will still retain a strong Swiss presence, it now has a Danish core and has moved into second place worldwide thanks to the merger.
Earlier this month, DSV Panalpina’s new chairman, Thomas Plenborg said: “We’ve made the biggest acquisition in the history of DSV, and we’ve made a promise to our shareholders that we can successfully integrate Panalpina. We are fully committed [for the next 12-18 month] to delivering on that promise and believe in the many synergies that can come from the combination: better and more services, stronger networks, greater buying power. The business case is solid, and I believe it’ll be absolutely amazing once the integration is complete.”
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