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Monday, November 10, 2008
DHL to Cut 9,500 Jobs Amid Rollback in U.S. Service
By Donna Fuscaldo
FOXBusiness
DHL, the international courier owned by Germany’s Deutsche Post World Net, is discontinuing its U.S. air and ground service, resulting in an additional 9,500 job cuts.
“This is the right move for our U.S. Express operations given the current economic climate and for the long run,” said John Mullen, Global CEO of DHL Express in a press release Monday. “Focusing our U.S. Express efforts on what we do better than anyone else--– international shipping -- serves the best interests of our customers, employees and shareholders around the world.”
DHL plans to close its U.S. ground hubs and cut the number of stations from 412 to 103 at the end of January, resulting in the thousands of job losses. The job cuts come on top of the roughly 5,400 it has already cut since the start of the year.
DHL does plan to keep 3,000 to 4,000 U.S. Express employees who are focused on international express customers. DHL expects to reduce its operating costs for its U.S Express unit over 80% to under $1 billion from $5.4 billion as a result of the actions.
DHL’s job cuts come at a time when unemployment in the U.S. is facing a high not seen since 1994. On Friday the Labor Department reported that unemployment in October rose to 6.5%, up from 6.1% in September. According to the data, employers cut a seasonally adjusted 240,000 jobs last month, with companies cutting 1.2 million jobs so far this year.
While the financial industry has been hard hit by job losses, the global financial crisis is reverberating throughout the economy and impacting just about every company. Layoffs have been across many sectors and not only focused in the financial industry.
With many of the job cuts for DHL coming from the main hub in Wilmington, Ohio, the news of the layoffs prompted reaction from Sen. George Voinovich of Ohio.
In a statement Voinovich said "thousands of hard-working individuals and families affected by this decision, by no cause of their own, find themselves in a crisis of uncertainty about their future today. While the Ohio delegation – working with Gov. Ted Strickland and Lt. Gov. Lee Fisher – has been fighting to save these jobs, it was always kept in mind the possibility that these jobs could still be lost, and contingency plans were also discussed." The Senator went on to say that his staff is working to "ensure that state and local governments have the full federal resources needed to cope with this economic disaster. I’m sure all of us will urge the next administration to make extraordinary efforts to deal with what may be one of the worst economic dislocations that we’ve faced as a nation. We must pull together to help our fellow citizens, especially our families, in times of hardship.”
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