News / K+N may be trying to 'cut itself to greatness'

© Antonio Guillem

Back in October, Kuehne + Nagel, citing “very challenging market conditions” and “challenging external factors”, announced “group-wide cost reduction measures” – as all forwarders seem to do from time to time.

Between 1,000 and 1,500 jobs were in the firing line as the group announced Ebit had fallen 13%; Sea and Air Logistics’ combined year-to-date Ebit was down 16%; group EPS down 18%; and the resultant Sfr200m cost-cutting programme – with a pledge that it would mainly be operational staff, not commercial, that would go.

It has been a bumpy ride, by all accounts. News from recruiters and those who have left continues to echo on social media.

One senior source from the company said the atmosphere had soured, while a once-proud culture was eroding, and fast.

“It’s obvious that they are getting rid of all the long-standing employees because, number one, they’re the most expensive, but they’re also the people that still have influence, and they don’t want those people that will speak up. They want to be sitting on a Swiss mountain, deciding what to do, while you just shut up and do it. That’s the culture they’re creating.”

K+N has always been one of those companies where people stay for years, if not decades. So the shake-up has been even more profound.

“The culture of Kuehne Nagel has always been its backbone,” said one former employee. “Competitors have always asked ex-employees and even current staff, ‘can you tell us what it is about K+N and the culture they’ve created? It’s so hard to get people from them’.

“It was a great culture, but it is gone. It’s fear; you do what you’re told. Nobody will speak up, people are afraid, and few are happy there. The only people that are happy are those sitting in shame; 95% of staff are demotivated, do the bare minimum, and have zero trust in the organisation.”

The Loadstar sources also questioned the pledge that jobs would mostly be lost from operations, rather than sales.

“That’s not true. They just cut the global account programme from 400 customers to 200 customers. And at least 40 people have been let go due to this global account downsizing. So how can the company say there’s no commercial impact?

“There seems to be a movement to have all sales fall under business units in the near future. It is also believed by many that eventually there will also be no country managers.”

The Loadstar put a series of questions to Kuehne + Nagel on this topic, including cuts to the global account programme. Most were not answered, but a spokesperson did claim: “The country and cluster organisation is not in question.”

Last month, just before the US holiday, there was “another round of bloodbath,” said a source. “Air management fired many people in the US and Americas just one week before Thanksgiving – ruthless and careless. There were also releases in other business units, but exact details have not yet been confirmed.

“One has to wonder where this ends and how they expect to service customers that are likely already seriously questioning the decisions being taken.”

The K+N spokesperson added: “The cost-saving initiatives announced in October apply to the entire organisation and all geographies and are proceeding as planned. We will provide an update during our full-year earnings in March 2026.”

There is much unease over the chief executive, Stefan Paul, who appears not to have endeared himself to many within the company, and it is clear that the share price has deteriorated under his tenure.

In fact, the share price has fallen about 46% since the CEO joined in August 2022.

The Loadstar has also learned of a ‘town hall’ meeting last month, when head of sea freight Michael Aldwell was asked: “How do you feel all these drastic changes are working out?” To which he is said to have replied: “We will see in five years’ time.”

Many are wondering how the shareholders would feel about such a comment. K+N neither confirmed nor denied that the exchange took place.

One source said K+N was no longer an LSP, but various companies acting independently. One source said: “Everybody works separately. Maybe this is what they think is the future, but I can tell you from experience, this is not what the market demands.

“They’re lucky the market right now is on the opposite end of the spectrum, where there’s too many people looking for jobs, because if it was on the other side, where the market was aggressively pursuing talents, they would be in serious trouble.”

The Loadstar asked Oscar de Bok, CEO of DHL Global Forwarding, for his opinion on companies implementing heavy cost cuts.

He explained: “Our philosophy is that, in a time of economic uncertainty, you need to find the combination between being lean and being ‘fit for growth’.

“I often talk about ‘fit for growth’, because it has two elements: you need to be fit, as in lean, not overweight, and therefore competitive; but you need to invest in muscle as well, otherwise you don’t run. You’ve got to have the capacity to do that.

“If in some cases you cut too deep and you become too lean, you lose your muscles, and that’s not helpful, because when the market picks up, you want to be ready to run.

“So it’s about keeping a very precious balance. And teaching the organisation to think about opportunities, not only cutting costs.

“You never cut yourself to greatness.”

Kuehne + Nagel has also set out its position in response to Loadstar Premium articles here.