DHL's parent company will cut 9,500 U.S. jobs

November 11, 2008|By New York Times News Service

Deutsche Post, the German mail and logistics group that runs DHL, said yesterday that it would cut 9,500 jobs at its United States unit as it effectively conceded the American market to its rivals, FedEx and United Parcel Service.

The move was a sharp reversal for Deutsche Post, which had said that it was planning to maintain its American operations by turning over its domestic air-cargo service to a rival, UPS. But the express package business has been suffering under the sharp downturn: Express shipments in the United States carried by the big three fell in the third quarter for the first time since the 2001 recession.

U.S. Express, as the American unit is known, will discontinue its domestic-only air and ground services in January to focus entirely on its international offerings. DHL, which is based in Plantation, Fla., said it would close its U.S. Express ground hubs and reduce the number of stations from 412 to 103, resulting in 9,500 job cuts on top of the roughly 5,400 positions it has eliminated since January. The company said it would retain 3,000 to 4,000 employees to serve its international express customers.

Even after the layoffs, DHL Express will employ 30,000 people in its American operations, which are critical to its international network.

DHL officials said in a statement that final decisions on what jobs would be cut would be made during the next few months.

The company expects to spend an additional $1.9 billion on the restructuring, bringing to $3.9 billion the two-year cost of overhauling its American operations. The U.S. business will probably post a 2008 loss of $1.5 billion before one-off costs, it said.

Deutsche Post acquired DHL in 2002 and combined it with Airborne Express in 2003.

The Associated Press contributed to this article.

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