Kuehne+Nagel Axes 2,000 Jobs Then Pivots to AI as Next Cost Weapon

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Kuehne+Nagel has completed its 2,000 person layoff program and is now turning to artificial intelligence as its primary tool for further cost reduction, with CEO Stefan Paul signaling that divisions failing to grow will face renewed scrutiny.

The Swiss logistics giant published its second quarter 2026 results on July 23, revealing that the headcount reductions, which were fully executed by the end of March, saved approximately $193 million as part of a broader $258 million cost reduction initiative. With those cuts now behind the company, management is accelerating AI deployment across operations to drive what Paul calls “measurable efficiency gains” without additional mass redundancies.

“If you have business units that aren’t growing, it makes sense to take a look at the costs,” Paul told media following the quarterly earnings report, speaking alongside CFO Markus Blanka-Graff. The statement lands at a moment when Kuehne+Nagel‘s Sea Logistics division continues to struggle with volume pressure, while Air Logistics and Road Logistics post stronger recoveries.

The numbers tell a divided story. Net turnover rose 8% year over year to CHF 6.6 billion in the second quarter. EBIT climbed 11% to CHF 381 million. Air Logistics saw EBIT surge 35% to CHF 154 million, fueled by strong demand in general cargo and hard cargo segments. Road Logistics posted a 42% EBIT jump in the first quarter, driven by European and United States demand.

But Sea Logistics remains the weak link. Volumes declined 2% year over year in the first quarter, with Middle East disruptions causing GCC bookings to collapse by 70% to 80%. While unit profitability recovered in the second quarter, with the conversion rate improving from 25% to 29%, the division’s lack of top line growth makes it a natural target for Paul’s cost discipline.

The company has already shown it is willing to walk away from low margin business. In Air Logistics, Kuehne+Nagel deliberately slashed lower yielding e commerce and perishable volumes, with e commerce cargo dropping more than 50% year over year in the first quarter. The strategy is clear: protect margins even if it means shrinking in certain segments.

“We are accelerating the deployment of artificial intelligence across the organisation,” Paul said in the second quarter report. “From optimising operational processes to integrating AI agents, we are creating the foundation for measurable efficiency gains and the continuous enhancement of service quality.”

The AI pivot represents a shift in how Kuehne+Nagel plans to extract costs. The first phase was blunt: eliminate over 2,000 full time positions from a workforce of roughly 85,000. The second phase is technological. AI agents will handle operational optimization, reducing the need for manual intervention in routing, documentation, and customer service workflows.

CFO Markus Blanka-Graff noted during the first quarter earnings call on April 24 that the company was running ahead of plan on savings, having already achieved roughly half of its quarterly CHF 50 million run rate target in the first three months alone. With the full year 2026 recurring EBIT guidance now raised to CHF 1.35 billion to CHF 1.55 billion, up from the previous CHF 1.25 billion to CHF 1.40 billion range, the pressure to deliver is higher, but the tools are changing.

Contract Logistics offers another window into the strategy. The division logged more than 30 new contracts in implementation during the first quarter, with a stable return on invested capital. It is growing, so it is not in Paul’s crosshairs. The no growth divisions, however, have been put on notice.

The message to the market is unambiguous. Kuehne+Nagel has proven it can cut deeply when necessary. Now it wants to prove it can cut smartly, using AI to trim fat without drawing blood. Whether that proves enough to offset persistent weakness in ocean freight volumes remains the open question investors and competitors will watch through the second half of the year.