TNT:Cost cutting 'sound and necessary'

[NEWS]

FORBES.COM

(Updating with background on TNT reorganisation, job cuts)

AMSTERDAM (Thomson Financial) - TNT NV said in a statement that an independent study by the Boston Consulting Group has shown that its cost-cutting plans for its TNT Post Dutch mail operations are 'sound and necessary.'

The second opinion study, which was requested by unions and the TNT Post works council after TNT announced plans to cut as many as 7,000 jobs in the future, said the postal giant's plans were needed if the company is to achieve its targeted return on sales, according to TNT.

The company said the Boston Consulting Group study does not exclude the possibility that additional measures will be needed in the longer term.

The study will be used to inform ongoing negotiations between TNT and its unions, according to the company's statement.

Representatives of the CNV labour union and BVPP postal union said they interpreted the study as proof that reorganisation is needed at TNT Post.

'Now it is time to talk about how to realise that,' a CNV representative said.

Both unions will press TNT to offer programmes enabling workers voluntarily leaving the company to seek other work.

Because the reorganisation is expected to play out in the long term, BVPP spokesman Rik Vergunst said he does not expect to see major lay-offs in the near future.

TNT Post's first reorganisation plan, released last December, called for 300 mln eur in cost cuts. At that time, the company said 11,000 jobs would be trimmed between 2007 and 2010 and that forced lay-offs would be unavoidable.

The company revised its plans in April, saying that in order to break even, between 6,500 and 7,000 jobs would have to go in the next two and a half years. The company said forced lay-offs could not be ruled out, but that it expected the bulk of the downsizing to be carried out organically.